Goldcorp, Glamis to merge
Canadian firm Goldcorp Inc. said Thursday that it has struck a friendly $9.5-billion deal to buy Glamis Gold ofNevada.
The all-stockmerger would create the world's third biggestgold mining company, behind Barrick Gold and Newmont Mining.
Shareholders of Reno-based Glamis are being offered 1.69 shares of Goldcorp for each of their shares, putting a value of $51.49 US on Glamis shares.
Glamis stock soared in Thursdaytrading on the TSX, while Goldcorp shares tumbled. Glamis Gold stock jumped almost 18 per cent (up $7.68 to $50.70). Goldcorp shares fell $3.22 to $30.558, a drop of more than nine per cent.
"The combination of Goldcorp and Glamis will create a world class low-cost gold producer in the Americas with industry-leading growth from an excitingportfolio of development projects,"Goldcorp president and CEO Ian Telfer said in a release.
Telfer will become chairman of the new company, which will carry the Goldcorp name and be based in Vancouver.Glamis president and CEO Kevin McArthur will continue in that role at the new firm.
Goldcorp shareholders will wind up own approximately 60 per cent of the new firm, andwill appoint six of the board's 10 members. Glamisshareholders will own the other 40 per cent of the new firm and appoint the remaining directors.
The deal requires the approval of two-thirds of Glamis shareholders at a vote.
Glamis has agreed to pay a $215-million US break fee to Goldcorp under certain circumstancesif the deal isn't completed.
Glamis has alsogiven Goldcorpthe right to match competing offers.