Glamis Gold Bids To Buy Goldcorp For $17.80/Share

*DJ Glamis Gold Bids To Buy Goldcorp For $17.80/Share >GLG

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December 16, 2004 08:15 ET (13:15 GMT)- - 08 15 AM EST 12-16-04

Glamis to launch take-over bid for Goldcorp

TORONTO, Dec 16 (Reuters) - Glamis Gold Ltd. (GLG.TO) said on Thursday it plans to make a take-over bid for fellow miner Goldcorp Inc.
Glamis said it intends to offer Goldcorp shareholders 0.89 of a Glamis common share for each Goldcorp common share. The offer values Goldcorp at $17.80 per share and represents a 22.6 percent premium based on the average trading price for both companies in the previous 30 days.  

Glamis Gold makes bid for Goldcorp (GG, GLG, WHT, CA:G, CA:GLG, CA:WRM) By Susan Lerner
NEW YORK (CBS.MW) -- Glamis Gold (GLG) said Thursday it would offer to buy Goldcorp (GG) through an exchange of 0.89 of a Glamis share per Goldcorp share (CA:G) , valuing Goldcorp at $17.80 a share. Earlier this month, Goldcorp and Wheaton River Minerals (WHT) (CA:WRM) announced a $2 billion all-stock deal for Goldcorp to buy Wheaton. "Goldcorp shareholders should contact their Board of Directors to demand the opportunity to decide between receiving a premium under our offer or paying a premium to Wheaton River," Glamis CEO Kevin McArthur said in a press release


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By 2007, it said, the combined company should have production of more than 1.4 million ounces, based on projects now in the pipeline and the companies' exploration portfolios.

As well, it said, the new company would boast a high-quality, low-cost asset base “with long mine lives and excellent prospects for discovery and reserves expansion.” Total cash costs are expected to be less than $120 (U.S.) an ounce over the next five years.

“We believe that we are offering a full and fair price to Goldcorp shareholders along with the opportunity for them to share in the
exciting upside at our projects,” Mr. McArthur said.

Based in Reno, Nevada, Glamis is an intermediate gold producer with holdings in Nevada, Mexico and Central America.

Goldcorp is known for its profitable Red Lake mine in Ontario.  

DOW JONES NEWSWIRES
December 16, 2004 11:26 a.m.

By Lynne Olver
Of DOW JONES NEWSWIRES
VANCOUVER -- Goldcorp Inc. (GG) shares are up 12% early Thursday after Glamis Gold Ltd. offered 0.89 of a share for each Goldcorp share, potentially derailing Goldcorp's friendly plan to acquire Wheaton River Minerals Ltd. (WHT).

In a brief research note, UBS analyst Tony Lesiak said Glamis is using its premium stock valuation to make a hostile offer for Goldcorp, which trades at a lower premium to its net asset value.

"The 23% premium appears dilutive to Glamis as no synergies can be expected," Lesiak wrote. "The concern is whether it will retain its premium rating."

The key benefit to Goldcorp would be that it will continue as a larger pure-gold play, but with less potential for an upward rerating in the marketplace than with Wheaton River, Lesiak said.

As reported, Glamis said its implied offer for Goldcorp is $17.80 a share, a premium of 27% to Goldcorp's closing price Wednesday of $13.98.

A second Canadian mining analyst said he thinks Goldcorp shareholders will be more amenable to receiving a premium than paying one to acquire Wheaton River.

As for other potential bidders emerging for Goldcorp, this analyst said there have been long-standing quesions about whether Placer Dome Inc. (PDG), which operates the Campbell mine beside Goldcorp's Red Lake mine in northern Ontario, would make a move to acquire Goldcorp.

"Placer has always been one that's kicking around, and I wouldn't discount that," the second analyst said. "The last year for M&A in the gold world has been an absolute crazy one, so anything can happen at this point," the analyst said.

Glamis said its offer for Goldcorp is conditional on no deal being struck between Goldcorp and Wheaton River Minerals, among other items.

In New York Thursday, Goldcorp is up $1.65 to $15.63 after trading as high as $15.75. Glamis is down $1.29, or 6.7%, to $17.88. On the American Stock Exchange, Wheaton River is up 2 cents to $3.33.

Company Web Sites: www.goldcorp.com, www.glamis.com

-Lynne Olver, Dow Jones Newswires; 604-669-1595  

DOW JONES NEWSWIRES
December 16, 2004 11:26 a.m.

By Lynne Olver
Of DOW JONES NEWSWIRES
VANCOUVER -- Goldcorp Inc. (GG) shares are up 12% early Thursday after Glamis Gold Ltd. offered 0.89 of a share for each Goldcorp share, potentially derailing Goldcorp's friendly plan to acquire Wheaton River Minerals Ltd. (WHT).

In a brief research note, UBS analyst Tony Lesiak said Glamis is using its premium stock valuation to make a hostile offer for Goldcorp, which trades at a lower premium to its net asset value.

"The 23% premium appears dilutive to Glamis as no synergies can be expected," Lesiak wrote. "The concern is whether it will retain its premium rating."

The key benefit to Goldcorp would be that it will continue as a larger pure-gold play, but with less potential for an upward rerating in the marketplace than with Wheaton River, Lesiak said.

As reported, Glamis said its implied offer for Goldcorp is $17.80 a share, a premium of 27% to Goldcorp's closing price Wednesday of $13.98.

A second Canadian mining analyst said he thinks Goldcorp shareholders will be more amenable to receiving a premium than paying one to acquire Wheaton River.

As for other potential bidders emerging for Goldcorp, this analyst said there have been long-standing quesions about whether Placer Dome Inc. (PDG), which operates the Campbell mine beside Goldcorp's Red Lake mine in northern Ontario, would make a move to acquire Goldcorp.

"Placer has always been one that's kicking around, and I wouldn't discount that," the second analyst said. "The last year for M&A in the gold world has been an absolute crazy one, so anything can happen at this point," the analyst said.

Glamis said its offer for Goldcorp is conditional on no deal being struck between Goldcorp and Wheaton River Minerals, among other items.

In New York Thursday, Goldcorp is up $1.65 to $15.63 after trading as high as $15.75. Glamis is down $1.29, or 6.7%, to $17.88. On the American Stock Exchange, Wheaton River is up 2 cents to $3.33.

Company Web Sites: www.goldcorp.com, www.glamis.com

-Lynne Olver, Dow Jones Newswires; 604-669-1595  

If its bid is successful, the resulting entity would have a seasoned management team "from both sides;" a low-risk operational base with four mines, in Ontario, Nevada, Mexico and Guatemala; and the deal would remove Goldcorp's single-mine risk, McArthur noted.

Future acquisitions would likely also be in the Americas, he said.

With more than 1 million ounces of unhedged gold production and no base-metals production, the combined Glamis-Goldcorp entity would offer a "clear" alternative to the senior gold producers, and would have the trading liquidity of a senior stock, McArthur said.

Both companies "believe in gold," McArthur said, but he declined to say whether the new entity would hold back some gold production from sale, as Goldcorp does. "I'm frankly supportive of it," McArthur said of the practice, adding that he wanted to get feedback from shareholders. "I think it ( gold ) is going higher and I think it's a good idea," McArthur said.

In a brief research note, UBS analyst Tony Lesiak said Glamis is using its higher stock valuation to make a hostile offer for Goldcorp, which trades at a lower premium to net asset value.

"The 23% premium appears dilutive to Glamis as no synergies can be expected," Lesiak wrote. "The concern is whether it will retain its premium rating."

The key benefit to Goldcorp would be that it will continue as a larger pure-gold play, but with less potential for an upward rerating in the marketplace than it would have with Wheaton River, Lesiak said.

As reported, Glamis said its implied offer for Goldcorp is $17.80 a share, a premium of 27% to Goldcorp's closing price Wednesday of $13.98.

A second Canadian mining analyst said he thinks Goldcorp shareholders will be more amenable to receiving a premium than paying one to acquire Wheaton River.

As for other potential bidders emerging for Goldcorp, this analyst said there have been long-standing quesions about whether Placer Dome Inc. ( PDG ) , which operates the Campbell mine beside Goldcorp's Red Lake mine in northern Ontario, would make a move to acquire Goldcorp. "Placer has always been one that's kicking around, and I wouldn't discount that," the second analyst said. "The last year for M&A in the gold world has been an absolute crazy one, so anything can happen at this point," the analyst said.

But on the call, Glamis CEO McArthur said "we're unaware of any senior companies in this process, we have good intelligence that they aren't in the process and time will tell on that."

Glamis said its offer for Goldcorp is conditional on no deal being struck between Goldcorp and Wheaton River Minerals, among other items.

Williams estimated Glamis's stand-alone net asset value before the proposed acquisition at US$10.90 a share. After the proposed deal, its net asset value would fall by about 16% a share, he estimated.

Williams cut his rating to hold from buy because of the dilution to net asset value, but noted that "New Glamis" would be very strong, with about 1.5 million ounces of low-cost annual production by 2007 and no debt.

Williams doesn't own shares, and his firm doesn't have an investment banking relationship with Glamis.

As reported earlier, Reno-based Glamis said it would offer 0.89 of a share for each Goldcorp share, potentially derailing Toronto-based Goldcorp's friendly plan to acquire Wheaton River Minerals Ltd. (WHT) of Vancouver.

Glamis executives said on a conference call Thursday that they made this same offer to Goldcorp's special committee several weeks ago, and thought it was well-received, but it was rebuffed by the Goldcorp board.

On the Glamis call, one U.S. analyst said it would be more productive if Glamis stuck to its knitting and continued to explore for gold, or make acquisitions with minor premiums.

Glamis's bid represents a premium of more than 20% to Goldcorp's Wednesday closing prices in both Canadian and U.S. dollar terms.

But Glamis president and chief executive Kevin McArthur said on the call that the company was in fact sticking to its strategy with the Goldcorp bid. "That's what this is all about," he said, adding that the premium proposed "is basically a control premium, and the premium that's required to get a deal done."

In Toronto Thursday, Glamis shares are down C$1.94 to C$21.56, off 8.3%, on about 6.8 million.

Goldcorp shares are up C$1.54 to C$18.61, up 8.8%, on about 1.13 million.

Wheaton River shares are down 2 Canadian cents to C$4.05 on about 1.1 million.

Company Web Sites: www.goldcorp.com, www.glamis.com

He said that Goldcorp's earnings for the nine months ended Sept. 30 of this year were 19 cents (U.S.) a share but that would shrink to 5 cents a share over the same period if Glamis took over Goldcorp.

Glamis is looking at getting bigger at the expense of profits, he said.

Under the Wheaton plan, he said, Goldcorp's earnings would increase to 32 cents a share over a nine-month period with all the synergies realized under the merger.

"That's a six times differential in the net result. So I ask you: How do you make a small fortune? You start with a large fortune in Goldcorp and accept the Glamis bid," McEwen said.

He also predicted Glamis' share price would sink to $13 under the takeover.

It's been hovering at $20 recently on the Toronto Stock Exchange.

"They (Glamis) produce gold at a higher cost, they have no money on their balance sheet, and they're way over-capitalized," McEwen told investors.

Telfer, who has joined McEwen on his road show, warned the audience that under the Glamis takeover "there's going to be a rush to the exits and the line forms behind Rob. And a lot of these retail shareholders, I can tell you, are going to come with him."

xwww.thestar.com

GG, GLG should stay single Michael Fowler said
Wed Jan 19, 2005 12:39 PM ET
(Amounts in U.S. dollars)
VANCOUVER, British Columbia, Jan 19 (Reuters) - Goldcorp Inc. shareholders should reject proposed mergers with Wheaton River Minerals Ltd. and Glamis Gold Ltd. as both Goldcorp and Glamis are better off on their own, an industry analyst said on Wednesday.
As North American gold analysts came out in favor of one or the other of the deals, Desjardins Securities' Michael Fowler urged Goldcorp shareholders to vote no on Jan. 31 to its planned $2 billion takeover of Wheaton and not to tender their stock to Glamis' $2.7 billion offer for Goldcorp."We do not find either takeover to be compelling in terms of creating shareholder value," Fowler said in a note to clients. "Our findings indicate that it would be better for Goldcorp and Glamis Gold to stay single."
He said Glamis is paying too high a premium for Goldcorp and that it was a "tall order" to squeeze out the cost-savings about $60 million a year needed to make the transaction worthwhile."Imagine if Goldcorp were to remain single these types of savings could have a dramatic effect on its own cash flow," Fowler said.Turning to the Goldcorp-Wheaton deal, he said that Wheaton did not have a long track record of getting mines to production and that its main asset, the Alumbrera mine, was a mature operation."Also, there are no synergies with this merger and the two existing CEOs, although entrepreneurial, have very different styles," he said.($1=$1.23 Canadian)
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