Simultaneous offers from Golden Star Resources (GSC-T) and Coeur d’Alene Mines (CDE-N) have been put in the way of the March 30 merger agreement between Iamgold (IMG-T) and Wheaton River Minerals (WRM-T).
In announcements after the market close on May 27, Golden Star offered to take over Iamgold and Coeur to take over Wheaton. Both bids were priced higher than the proposed merger, which would have seen Wheaton River shareholders get 0.55 of a share of Iamgold for each share of Wheaton. (The new company would carry the name Axiom Gold.)
Golden Star offered 1.15 shares of Golden Star for each share of Iamgold, effectively pricing Iamgold shares at $8.33 based on closing prices on May 27. Coeur’s offer for Wheaton offered US$3.28 ($4.50) per share in cash or 0.649 of a share of Coeur, an equivalent value based on May 27 prices.
Iamgold and Wheaton released identically-worded statements that they were reviewing the proposals and would not comment until their reviews were finished.
A break fee under the Iamgold-Wheaton deal requires that if either company accepts a superior offer, it must pay an amount equal to 3% of its market capitalization to the other. Golden Star and Coeur agreed in advance that any break fee would be paid by the two with Coeur paying US$26 million to Golden Star.
Iamgold and Golden Star both have their principal property interests in West Africa; Iamgold has non-operating interests in the Sadiola and Yatela gold mines in Mali and the Tarkwa and Damang mines in Ghana, while Golden Star’s principal producing interests are the Bogoso and Prestea mines in Ghana.
Iamgold and Wheaton River shareholders are scheduled to vote on the proposed merger on June 8.
At the close of the market Coeur shares were down US37 at US$4.69 on May 28, reducing the imputed value of the Coeur offer to $4.16 per Wheaton share. Wheaton shares rose a penny to $3.96.
Golden Star also fell, sliding 48 to $6.76, bringing Golden Star’s offer for Iamgold down to $7.77 per share. Iamgold was up 29 at $7.67.
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