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Mexico is getting close to remonetizing silver
Glamis Gold's McArthur Says
McEwen Wooed Him to Run Goldcorp
By Doug Alexander
Bloomberg News Service
Friday, December 17, 2004
http://www.bloomberg.com/apps/news?
pid=10000082&sid=aBF.8Flb9vqE&refer=canada
TORONTO -- Glamis Gold Ltd. Chief Executive
Officer Kevin McArthur said he never expected
to make yesterday's $3.4 billion hostile bid for
Goldcorp Inc. That's because Goldcorp CEO
Robert McEwen had been wooing him.
In discussions that started in November 2003 at
the JW Marriott Desert Springs Resort and Spa
in Palm Springs, Calif., and progressed to a verbal
agreement last month, it was McEwen who
proposed that Glamis buy Goldcorp, McArthur
said in an interview yesterday.
McEwen would let McArthur run the combined
company, North America's sixth-biggest gold
producer. They called the deal "Project
Desert," McArthur said.
McArthur found out the plan was off on Dec.
5, when Goldcorp agreed to buy Wheaton
River Minerals Ltd. for $2.2 billion and
install its CEO, Ian Telfer, as McEwen's
successor. The rejection prompted Reno,
Nevada-based Glamis yesterday to make
a hostile offer for Toronto's Goldcorp.
"All's fair in love and war," said
McArthur, a 49-year-old who grew up in
the Canadian province of British Columbia.
"This may be a very skillful and clever
way for the Goldcorp shareholders to
bring this into a public process instead
of an agreed deal."
A spokeswoman for McEwen, 54, said he
was in meetings and wouldn't be available
to comment. Goldcorp said in a statement
today that its board will review the
Glamis proposal.
Glamis first examined Goldcorp's
operations in early 2004. McEwen took
the lead, holding "job interview-style
meetings" at first, McArthur said.
Talks between the companies languished
until September, when McEwen contacted
him again and they met at a Denver
gold conference, McArthur recalled.
"We came up with a deal we thought both
boards would support," he said.
Also in September, McEwen said he
planned to retire and Goldcorp was
looking for a replacement. In a letter
to the board, McEwen said the company
needed "a new CEO with different
skills" and pledged to remain in his
post until a successor was found.
McEwen is a "financial genius" who runs
Goldcorp with an eye to maximizing
returns on capital, McArthur said. By
contrast, McArthur said, he considers
himself an "operational" expert who
excels at getting the most production
at the lowest possible cost. McArthur
has a degree in mining engineering
from the University of Nevada.
A combination of the Glamis and
Goldcorp, Canada's fourth-biggest
gold company, would boost production
to 1.4 million ounces by 2007,
Glamis said. The company is building
mines in Guatemala and Mexico and
expanding in Nevada.
Gold prices reached $458.70 ounce on
Dec. 2, the highest since June 1988.
McArthur said he offered the same
terms to Goldcorp that he's offering
shareholders in the hostile bid: 0.89
of a Glamis share for each Goldcorp
share.
The offer valued Goldcorp at $17.80
a share, or 27 percent more than its
closing price Wednesday on the New
York Stock Exchange. Glamis shares
have since dropped, reducing the
value of the transaction to about
$3 billion.
Glamis shares rose 39 cents to $18.14
in 1:53 p.m. trading. Goldcorp fell
7 cents to $15.02.
Goldcorp's board rejected McArthur's
offer in favor of Vancouver-based
Wheaton River, where Telfer has been
CEO since September 2001. McEwen
agreed to swap one Goldcorp share for
every four of Wheaton River and make
Telfer CEO. McEwen would be chairman.
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