New bid, same response (September 07, 2004)

Wheaton River Minerals (WRM-T) has told its shareholders to reject the renewed takeover offer from Coeur d’Alene Mines (CDE-N). The company also says any shares that have already been tendered should be withdrawn immediately.

The takeover target’s special committee of directors unanimously recommended rejection, maintaining, as it has since May, that the offer is “financially inadequate and highly dilutive.” The committee added that Coeur has had a lengthy history of significant losses.

Wheaton said, in a prepared statement, that the board and committee have serious reservations about the ability of Coeur’s management team. Coeur responded that its management has more than 400 years of combined exploration, development and operational experience.

Coeur’s new bid is unchanged from the previously scrapped one, aside from the expiration date, and is open to Wheaton shareholders on both sides of the border; it expires at the end of September. The previous bid was terminated, owing to delays in offering it to Canadian investors.

Coeur’s bid stands at 0.796 of one of its shares, or up to $5.47 in cash to a limit of $570 million, for each share of Wheaton. If all of Wheaton’s shareholders elect to take the cash, they would be limited to $1 per share, with the balance made up of 0.65 of a Coeur share per Wheaton share.

Under the all-cash proposal, the offer amounts to $4.29 per share and represents a 16% premium over Wheaton’s closing stock price on the Toronto Stock Exchange on Aug. 20, the day before the new offer.

The offer requires the approval of Coeur’s shareholders, which will be sought at a meeting on Sept. 30. Wheaton’s shareholders are scheduled to vote on the offer the same day; Coeur requires the tender of at least two-thirds of Wheaton’s shares.

Despite the latest rejection, Coeur CEO Dennis Wheeler says his company’s offer continues to receive support from Wheaton River shareholders and that Coeur remains committed to completing the transaction.

Meanwhile, the two companies recently came to a truce of sorts, with Wheaton River agreeing to postpone by more than a month the spinoff of its silver assets into Silver Wheaton; that transaction is now slated to close on Oct. 15. For its part, Coeur has said it will allow the spinoff to go ahead if its bid for Wheaton is not successful by that date.

The two say the agreement avoids a costly regulatory hearing; Coeur had previously filed with the British Columbia Securities Commission, seeking to delay Wheaton’s silver deal with Chap Mercantile (CPC-V).

“We are pleased that Wheaton River’s Board has now listened to its shareholders, and to Coeur, and agreed to a postponement,” says Wheeler. “We have consistently said that it is in the best interest of Wheaton River shareholders for Wheaton River to postpone the closing of the Silver Wheaton transaction until after the expiration of Coeur’s offer.”