Iamgold’s shareholders reject merger

COEUR d’ALENE — The proposed merger of two Canadian gold mining companies failed Tuesday, freeing Coeur d’Alene Mines Corp. to pursue a hostile takeover of one of the firms.

The merger of Iamgold Corp. and Wheaton River Minerals Ltd. would have created Canada’s fourth-largest gold producer. In Tuesday’s voting, however, nearly 58 percent of Iamgold’s shareholders rejected a plan to buy Wheaton River for $1.7 billion. The measure needed a simple majority to pass.

When Iamgold’s results were announced, Wheaton River’s management canceled its own shareholders’ vote on the proposal.

Coeur d’Alene Mines made an unsolicited offer for Wheaton River in late May. Its board of directors rebuffed Coeur’s advances, prompting Coeur to raise its offer to $2 billion in stock and cash. With still no interest from Wheaton’s board, Coeur began meeting directly with Wheaton’s shareholders.

“We are pleased with today’s outcome and we are encouraged by the strong support we continue to receive from Wheaton River shareholders,” Coeur Chairman Dennis Wheeler said Tuesday.

He will again ask Wheaton River’s board to begin merger proposals. In the meantime, Coeur is filing paperwork with U.S. and Canadian regulators to make an offer directly to Wheaton’s shareholders.

Wheeler has steadfastly maintained that Coeur’s offer is more advantageous for Wheaton shareholders than Iamgold’s. Fairvest Corp. also rated the offer as more favorable. Fairvest is the Canadian affiliate of Institutional Shareholder Services, the largest U.S. adviser to mutual funds, including Fidelity Management, which is Wheaton’s largest shareholder.

Wheaton’s board, however, said a merger with Coeur wouldn’t advance the company’s goal of becoming a large, low-cost gold producer. Board members also raised concerns about Coeur’s record of financial losses, despite rising gold and silver prices.

The outcome of Tuesday’s vote also raised the possibility of a hostile takeover of Toronto-based Iamgold by Golden Star Resources of Denver. Both companies have gold properties in Ghana.