Goldcorp offers to take over Wheaton

Wheaton River Minerals (WRM-T) has finally found a deal it likes, a friendly merger offer from Goldcorp (G-T) for a one-for-four share swap.

Goldcorp is the one paying the premium, about 7% over Wheaton’s average price in the last month. The all-paper offer represents a cash value of $4.29 per share for Wheaton.

The new board would have ten directors, five nominated by Wheaton, and Wheaton’s chief executive Ian Telfer would take over as chief executive. Goldcorp’s current chairman, Robert McEwen, would continue at the head of the board.

An earlier takeover offer for Wheaton, first launched in late May by Coeur d’Alene Mines (CDE-N), was valued at $4.29 as well, after a series of changes to the bid. That offer failed to get the requisite number of shares and Coeur abandoned it in late September.

The original offer in May was for $4.50 per share, based on Coeur’s share price at the time; subsequent price declines forced increments to the bid over the summer.

That bid had helped to break up a friendly deal announced between Wheaton and Iamgold (IMG-T) in March, which would have seen Wheaton shares traded for 0.55 of an Iamgold share. At the time, that offer represented a cash value of $4.60 per share.

Wheaton still requires a fairness opinion from its financial advisers, and Goldcorp’s offer is conditional on satisfactory due-diligence investigations and on seeing a minimum of two-thirds of Wheaton shares tendered to the bid. There is a break fee of US$35 million for Goldcorp if Wheaton gets a superior offer. A 21-day exclusive negotiation period, starting Dec. 5, will allow the companies to complete due-diligence investigations.

In trading on the Toronto Stock Exchange, Goldcorp shares were up 1 to $17.16 and Wheaton shares were up 38 to $4.14.