Wheaton River, Iamgold stand by their merger plan, reject U.S. suitors ( The
anadian Press )
TORONTO, May 31, 2004 (The Canadian Press via COMTEX) -- The boards of Wheaton
River Minerals and Iamgold Corp. said Monday they still believe a proposed
merger between them is a better opportunity than rival bids last week by two
American companies, which are seeking to prevent a marriage of the two mid-sized
Canadian gold producers.
Vancouver-based Wheaton River was first off the mark in rejecting an unsolicited
shares-and-cash offer from U.S. silver producer Coeur d'Alene Mines Corp.,
valued at $2.5 billion when it was made last Thursday.
Toronto-based Iamgold followed with a similar statement later Monday, rejecting
an all-stock bid from Golden Star Resources Ltd. of Denver that was worth $1.2
billion when it was made last week.
Although Coeur and Golden Star co-ordinated their offers in an unusual tag-team
approach, the two U.S. companies said they had each been independently preparing
offers for their prospective targets. Both said they were offering shareholders
a premium to the recent stock prices of Wheaton River and Iamgold and that they
provided a better alternative to shareholders.
But Ian Telfer, Wheaton chairman and chief executive, said Monday the Wheaton
board "continues to believe that the Iamgold transaction is the best alternative
for creating long term shareholder value."
"We entered into the transaction with Iamgold as we believed that the strategic
benefits to both Wheaton and Iamgold are significant. We continue to believe
that this is so and are pleased that Iamgold has confirmed its determination to
proceed with the combination," Telfer said in a statement.
Joseph Conway, Iamgold's president and CEO, said in a statement that the
objective of the Iamgold-Wheaton River combination is to give their shareholders
exposure to low-cost gold production, geographic diversity and a strong balance
sheet with exceptional cash flow.
"These strong fundamentals overwhelmingly exist within the Iamgold-Wheaton River
transaction," Conway said.
Iamgold said the Golden Star offer would reduce Iamgold's financial strength,
would be dilutive to earnings, cash flow and net asset value per share and
presents greater project development risk.
Wheaton said its decision is based on several factors, including a history of
losses and negative operating cash flow at Coeur d'Alene and greater transaction
risks than with the Iamgold proposal.
In addition, Telfer said that Coeur's shares - as with other silver producers -
trade at a high multiple. He said that multiple may not continue if Coeur is
seen as a gold producer rather than a silver miner.
Wheaton and Iamgold said they'll hold a June 8 shareholders vote on their merger
proposal, as planned prior to the surprise announcements last week.
For its part, Coeur issued its own release Monday saying that its bid offers
Wheaton River shareholder cash, greater trading liquidty and superior organic
growth in the Americas.
"We have received a positive reception from Wheaton River shareholders and will
continue to meet with them to inform them of our proposal," Coeur's chairman and
CEO Dennis Wheeler said in a statement.
"We are surprised and disappointed that Wheaton River's board has made a
recommendation to its shareholders without conducting any due diligence on Coeur
or its properties," he said, adding Wheaton River shareholders will have the
opportunity to make their own decision at their shareholder meeting.
Coeur says its combination with Wheaton River would create North America's
fourth-largest precious metals company and a top-10 global gold producer. It
would also entrench Coeur's position as the world's largest primary silver
producer, raising its annual production to 21 million ounces from 14.3 million.
Golden Star said its acquisition of Iamgold would make sense because both
companies concentrate on gold mining in West Africa.
DAVID PADDON
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KEYWORD: TORONTO
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