Coeur makes new offer (August 24, 2004)

Coeur d’Alene Mines (CDE-N) has launched anew its $2.4-billion offer to buy all the outstanding shares of Wheaton River Minerals (WRM-t).

The new offer, which remains unchanged from the previously sweetened version, will be mailed to all Wheaton shareholders; it will remain open until the end of September. Coeur recently scrapped the previous offer, owing to delays in mailing it to Canadian shareholders.

The Idaho-based silver miner says the 3.2 million shares tendered to its original offer will be returned and that interested shareholders will need to re-tender to the new offer.

Coeur’s offer 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.

Based on the all-cash proposal, Coeur’s 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.

Coeur’s offer is subject to the tender of at least two-thirds of Wheaton’s shares, Coeur shareholder approval of new stock issuance, and regulatory approval.

The formal offer to Canadian shareholders has been a long time coming; the company says the delay reflects stringent regulatory rules in Canada and the fact that documents had to be translated into French.

Wheaton CEO Ian Telfer laments the delay, remarking that the company had had 46 days and counting, and had still not said anything to Canadian shareholders. Wheaton’s board of directors has also long refused to offer its opinion on Coeur’s offer, citing the lack of a Canadian component.

If successful, Coeur’s bid would result in the creation of the fourth-largest precious metals company in North America and the world’s biggest silver producer.

In other news, Coeur has filed amended financial reports for the recent first quarter and for 2003 and 2002. The company says the changes increase revenue and reduce its loss to the tune of US$1.3 million for the first quarter, US$400,000 for all of 2002, and US$800,000 for 2003.

Coeur’s recent first-quarter loss is now pegged at US$1.7 million; the loss for 2003 is US$66.2 million, and the 2002 loss amounts to US$80.8 million.

The amendments reflect the correction of a timing error in accounting for price changes for concentrate sales under some contracts.