Coeur bumps Wheaton bid; Golden Star heads to court

It’s fatter, and more complex: Coeur d’Alene Mines (CDE-N) has bumped the value of its bid for silver producer Wheaton River Minerals (WRM-T), while bridge partner Golden Star Resources (GSC-T) has applied for a court ruling that an earlier standstill agreement does not apply to its bid for Iamgold (IMG-T).

Coeur is now offering $5 per share in cash for Wheaton, but only up to the previously prescribed limit of $285 million. It has increased its share bid up to a value of $5.06 “based on Coeur’s closing share price” on May 27 (US$5.06); that implies a trade ratio of 0.736 Coeur for one Wheaton share, up from 0.649.

In addition, Coeur is now offering up to $5 per Wheaton share in a new series of senior subordinated notes, with a limit of $285 million set on this component of the bid. The notes bear interest at 9%, would have a term of seven years, and would not be callable for four years.

Coeur plans to substitute shares for cash or notes if the shares tendered to its cash or note bids exceed the limits.

Wheaton acknowledged receiving the bid and said it would not comment further.

Golden Star, meanwhile, responded to Iamgold’s rebuff by seeking a ruling in the Ontario Superior Court that its bid does not violate a standstill clause in a September 2003 confidentiality agreement with Iamgold, made when the two African gold producers had considered possible deals. Golden Star had earlier requested a shareholder list from Iamgold to mail out its bid, which came with a letter from Iamgold taking the position that any offer breached the earlier confidentiality agreement.

Golden Star said that if the court agreed it was no longer bound by the agreement, it would go directly to a formal takeover offer for Iamgold. The application is to be heard June 7.

Iamgold’s response, in turn, was that it continued to believe Golden Star’s bid would dilute the shareholders’ interest in Iamgold earnings, and that Golden Star’s development projects (Wassa and the Bogoso-Prestea expansion) would be a drain on the merged company.