Goldcorp wins ownership fight for Dickenson and Kam-Kotia

Goldcorp won the takeover fight for the two companies when rival suitor Corona Corp. (TSE) withdrew its bid following a decision by the Supreme Court of Ontario to dismiss an injunction by Corona blocking the Goldcorp offers.

Goldcorp, whose bid ended the day after the court heard the injunction application, says it and related companies, with all the tendering of shares, will own about 88% of the outstanding B shares of Dickenson (including B shares held by Kam-Kotia), 53% of the outstanding A shares of Dickenson and 96% of the outstanding common shares of Kam-Kotia (assuming full conversion of the outstanding preferred shares).

Bid by Goldcorp was $9 for each Dickenson B share (worth 10 votes), $8.50 for each A share (worth one vote) — for up to 50% of the outstanding A shares — and $3 for each Kam-Kotia share. More A shares tendered

Goldcorp was bidding for about 4.9 million A shares; it says that because about 7.6 million A shares were tendered, the shares tendered will be pro-rated on the basis of about 65%.

The gold fund, managed by CSA Management Ltd., says it intends to acquire the balance of the outstanding Kam-Kotia shares, but has no intention at present of acquiring any more Dickenson A and B shares. Goldcorp indicated earlier it would borrow from a bank to finance the takeover.

Included among the shares tendered to Goldcorp were the holdings of Pamour Inc., which owned 507,000 Dickenson B shares and 987,800 Kam-Kotia shares, purchased by Pamour in late 1987.

Corona, acting through wholly- owned subsidiary Corona Minerals, bid $7.15 for each Dickenson B share and $2.50 for each Kam-Kotia share. It also said its intention was to acquire Dickenson A shares at an equivalent price to the B shares.

“In our opinion, a price of $9 per share for Dickenson is not economic so we have withdrawn our bid,” Corona President Peter Steen said. `’We feel this is very unfortunate for the Dickenson A shareholder.

“Because Goldcorp is only offering to buy 50% of the A shares at $8.50 per share, the marketplace indicates the A shareholder will effectively receive about $6.88 per share. Completion of our proposal would have yielded all Dickenson shareholders $7.15 per share.”

Corona, which held 11,000 B shares, 1.54 million A shares and about 1.3 million Kam-Kotia shares, has tendered all of these shares to Goldcorp. Wharf holdings

What Corona will keep is its recently acquired holdings (a 7.6% interest) in Wharf Resources (TSE). Wharf, which operates a heap leach gold mine in South Dakota, is controlled by Dickenson through a 37.12% equity interest.

Corona announced its intention to launch a takeover bid of Dickenson and Kam-Kotia, which have interlocking ownership, at the end of January. The boards of directors of both Dickenson and Kam-Kotia recommended against the offers. Goldcorp announced its takeover bid during the first half of March, to the acceptance of the Dickenson and Kam-Kotia directors.

During the takeover fight, Corona extended its shareholder offers several times. Dickenson and Kam- Kotia also approached the Ontario Securities Commission over the Corona offers and CSA filed a lawsuit in the Supreme Court of Ontario over the Pamour shareholdings of Dickenson and Kam- Kotia, which Corona tried to acquire from Pamour. Current management of Dickenson and Kam-Kotia is expected to remain in place under the Goldcorp ownersh ip.

Dickenson’s major asset, aside from Wharf, is the A.W. White gold mine in the Red Lake area of northwestern Ontario. Kam-Kotia has interests in sodium sulphate operations in Saskatchewan but its main asset has been its shareholdings in Dickenson.

]]>