Business

IAMGold shareholders reject merger with Wheaton River

IAMGold shareholders reject merger with Wheaton River Minerals, only 42% vote in favour

IAMGold shareholders have given thumbs down to a proposed merger with Wheaton River Minerals.

Only 42 per cent of shareholders voted in favour of the merger Tuesday at a meeting that had to be postponed for several hours after it was discovered that more than 26 million ineligible shares had been included in the tally.

The result rendered meaningless the outcome of a vote one hour later by Wheaton shareholders on the proposed $2.9 billion deal.

The merger had received the endorsement of committees of independent directors of both IAMGold (TSX:IMG)and Wheaton. (TSX:WRM)

The rejection also left the door wide open to two hostile takeover offers for the Canadian gold mining companies.

Idaho's Coeur d'Alene Mines Corp. (NYSE:CDE)has made a $2.5 billion cash and stock offer for Wheaton, while Denver-based Golden Star Resources Ltd. (TSX:GSC)has made a $1.2 billion all-stock bid for IAMGold.

The outcome, announced after markets had closed, was a stunning setback for IAMGold's management team and board of directors.

Donald Charter, who chaired the meeting, said the vote "should not be taken as anything in favour or opposed to the Golden Star offer that is outstanding."

IAMGold president and CEO Joe Conway said he was "disappointed" and that the company would talk with its shareholders to find out why they didn't support the merger with Wheaton River.

Peter Bradford, Golden Star's chief executive, said he was pleased with the result of the vote and hoped IAMGold shareholders would tender to his company's offer by the July 16 deadline.

IAMGold shares closed up 15 cents at $7.55 on the TSX while shares of Wheaton Resources slipped 9 cents to $3.75. Golden Star shares closed 14 cents higher at $6.50 on the TSX and Coeur d'Alene shares lost 11 cents to $4.16 US on the New York Stock Exchange.