Gold Wheaton Gold Corp. came back to the table Thursday with an amended offer for its takeover by Franco-Nevada Corp. . The initial deal, announced in mid-December, elicited the opinions of some shareholders and warrant holders who were not totally satisfied with the structure.
David Cohen, Gold Wheaton's chairman and chief executive officer, wasn’t surprised that there were some concerns. “We did the deal over a weekend under some fairly considerable time pressures,” he says. “You don’t think through all of these things when you’re trying to get the deal done” under those constraints.
The acquirer, Franco-Nevada, was in a pressure cooker after its hand was forced by Quadra FNX Mining Ltd., which owned a 34.5 per cent block of Gold Wheaton shares and had just declared its position a non-core asset. Franco jumped at the shares put on the market and then went all-in to buy the entire company.
Under the deal’s old structure, both shareholders and warrant holders were forced to take a 60/40 split of shares and cash. Now the merging companies say they have a pot of both stock and cash to offer and shareholders can opt for one or the other. If Gold Wheaton shareholders think there is an upside to owning Franco-Nevada, “they’re swapping one piece of paper for another,” Mr. Cohen says.
If all Gold Wheaton shareholders elect to take cash, or if they all elect to take shares, the company will revert back to its 60/40 split.