McEwen loses round 1 versus Goldcorp

The Ontario Supreme Court has ruled that it will not order Goldcorp (G-T, GG-N) to have a shareholder vote on its proposed US$8.6-billion deal to acquire Glamis Gold (GLG-T, GLG-N).

Former Goldcorp chairman Rob McEwen, who remains Goldcorp largest individual investor with 6.1 million shares, had applied for a compliance order against Goldcorp under the Ontario Business Corporations Act.

With the Goldcorp offer for Glamis structured as a “plan of arrangement” rather than a “takeover bid” and the offer already approved by both boards, McEwen argued that, under the act, an Ontario corporation such as Goldcorp must receive shareholder approval to complete a “fundamental change,” such as this plan of arrangement with Glamis.

Goldcorp had always maintained that McEwen’s claim was “simply without legal merit.”

After the ruling, Goldcorp chairman and CEO Ian Telfer stated that “We are pleased that the Court has confirmed that the board of directors of Goldcorp has complied with all applicable legal and regulatory requirements and look forward to completing the transaction with Glamis. We continue to believe that the transaction is in the best interests of Goldcorp and all of its shareholders.”

Commented McEwen: “I am disappointed by the court’s decision and remain convinced that having no shareholder vote on such a fundamental and dilutive transaction is not in the best interests of shareholders.”

McEwen plans to immediately file a notice of appeal seeking an expedited appeal to the Court’s ruling, and is issuing Goldcorp and Glamis letters requesting that they do not conclude the deal before the appeal court’s ruling.

As well, since McEwen says he’s received over 1,250 support forms representing 27.4 million shares (including the influential Ontario Teachers’ Pension Plan), or 6.8% of the outstanding shares, he now has more than enough shareholders in his camp to force a special meeting of Goldcorp shareholders, where a vote on the Glamis transaction could be tabled.

Meanwhile, Glamis shareholders heartily approved the plan of arrangement with Goldcorp, with 98.6% support at its shareholder meeting this week.