Falconbridge pays $960 million for independence

A few days ago a small airplane buzzed by outside the window of William James’ office on the 40th floor of Commerce Court, in downtown Toronto.

The Falconbridge Ltd. (TSE) 0000,0600 chairman was intrigued to see that it was towing a sky-sign offering congratulations on the company’s successful bid for the 24.7% control block held by Placer Dome (TSE).

James himself says he has every reason to feel satisfied with the transaction, although it will cost Falconbridge a total of about $960 million to repatriate the block.

At that price, though, it will return to a position of independence from any controlling shareholder.

In the process of winning the game, Falconbridge beat out a rival bid from Noranda Inc. (TSE), although no details were forthcoming on that bid, and in fact Placer Dome would neither confirm nor deny to The Northern Miner that there even was such a bid from Noranda.

Under the terms of the finally hammered-out deal, Falconbridge will pay a special $4.75-a-share dividend to all Falconbridge shareholders, including Placer once it converts a $135-million debenture into common shares.

Falconbridge will also make a $64-a-share cash takeover offer to all shareholders of McIntyre Mines (TSE), as well as an $11.96 special dividend per share.

For the Falconbridge shares held by Placer, including shares acquired on the conversion of the Falconbridge debenture, the purchase price is $25.75 a share, and the purchase price is $4 each for the 750,000 Falconbridge warrants held by Placer.

And, in a follow-up to other McIntyre shareholders, the nickel miner says it intends to buy their McIntyre shares for $64 cash each, or exchange each McIntyre share for the number of Falconbridge shares held indirectly, or choose a combination of the two.

And finally, Falconbridge would pay an additional non-cash special dividend or distribution on its common shares to all of its remaining shareholders, which would exclude Placer Dome. This non-cash element would consist (N.M., July 4/88) of shares in a private company called Falconbridge Gold, a company which encompasses the gold-producing Hoyle Pond and Own Creek mines in the Timmins area of Ontario.