The $3.4 billion bid that Reno's Glamis Gold will make to shareholders of Goldcorp Inc.
next month is identical to a deal Glamis nailed down with a committee of Goldcorp directors this autumn.
After the full board of Toronto-based Goldcorp rejected the deal a few days before Thanksgiving, Glamis set in motion its allstock, no-cash plan to offer shareholders of Goldcorp 0.89 share of Glamis for each share of Goldcorp.
That values Goldcorp at $17.80 a share, a 22 percent premium over average trading prices in the past 30 days.
In the days after the Glamis bid was rejected, Goldcorp announced plans to buy Wheaton River Minerals Ltd.
of Vancouver.
If that deal continues, Glamis said, it will scotch its bid for Goldcorp.
Kevin McArthur, president and chief executive officer of Glamis, told analysts last week that his company's bid has been supported by major shareholders of Goldcorp.
What attracts Glamis to Goldcorp? The Red Lake Mine in Ontario, which produced more 400,000 ounces of gold at an average cash cost of $87 an ounce in the first nine months of this year.
Goldcorp describes Red Lake as the richest gold mine in the world and the biggest gold mine in Canada.
Glamis executives think the mine could be both bigger and better.
Although they didn't get into much detail with analysts, Glamis officials said they see opportunities to improve the efficiency of the mine and expand its reserves.
Twice in the past year,McArthur said, Glamis teams have taken close looks at Red Lake and other Goldcorp assets.
"Believe me, we know the Goldcorp assets," he said."We believe in Red Lake."
If Glamis is successful in its fight for Goldcorp, the Reno company would more than double its annual production and make a move into the ranks of the world's largest gold companies.
Glamis operates mines in Honduras,Mexico and Nevada, where it runs the Marigold mine 25 miles southeast of Winnemucca.
Most of that production has come to Glamis through acquisitions,McArthur noted.
Glamis intends to mail the take-over bid circular to Goldcorp shareholders in early January, giving them 35 days to act.
Glamis shareholders,meanwhile, need to approve an increase in the number of authorized common shares so that the company has shares to pay for the Goldcorp acquisition.
Glamis' financial advisors are Orion Securities Inc.
Its legal counsel are Lang Michener LLP and Osler,Hoskin & Harcourt LLP in Canada, and Neal, Gerber & Eisenberg LLP in the United States.
