It seems history really does repeat itself -- sometimes sooner than you might think.
Back in October, we first began writing about the three-way contest for control over the destiny of South African gold miner Gold Fields Limited (NYSE:GFI). That company wanted to merge its international operations with a Canadian gold mining outfit, Iamgold (AMEX:IAG). But at the same time as Gold Fields was working to hammer out that deal, South African rival Harmony Gold Mining Company (NYSE:HMY) began working to, er, undermine it. Harmony launched a full-scale press war in an attempt to convince Gold Fields shareholders to (1) reject the Iamgold merger and (2) accept, instead, a tender offer from Harmony.
Long story short, over the course of several months of a very public relations war, Harmony won itself a partial victory when Gold Fields shareholders narrowly rejected the merger with Iamgold in December. That's one battle won, but the war for control over Gold Fields continues (despite Gold Fields shareholder Norilsk Nickel's best efforts to broker a peace deal between the two warring parties.)
So that's the history. Now here's where it repeats. Shift your gaze back west to Canada, where on Friday, Toronto-based Goldcorp (NYSE:GG), the self-proclaimed owner of the "richest gold mine in the world," recommended that its shareholders (1) reject a tender offer for their shares, issued by America's Glamis Gold (NYSE:GLG) and (2) approve, instead, Goldcorp's preferred deal, a sale of Goldcorp to fellow Canuck gold miner Wheaton River Minerals (AMEX:WHT). Sound familiar? It gets more so.
As with the Gold Fields situation, Goldcorp first announced its intention to pair up with a desired target (Wheaton River). Sooner thereafter, that announcement sparked the interest of a rival. And after reviewing the rival's bid, the hunter-now-become-hunted pronounced its rival's bid inadequate. In Goldcorp's case, shareholders are being offered 0.89 shares of Glamis per share of Goldcorp tendered. Glamis characterized this as a buyout offer with a 22.6% premium, but in the wake of the tender offer, both companies' shares have tumbled, and the premium now amounts to less than 2%.
The final similarity between the two gold fights is, of course, that both remain unresolved. As we've previously explained, Harmony will likely have to up its bid if it is to have any chance of winning over Gold Fields shareholders. With the minimal premium now being offered for Goldcorp, it looks likely that the same will prove true for Glamis.
For more 24-carat Foolish writing, read:
- Norilsk Wags the Dog
- Canadian Gold Doesn't Glitter
- Gold Offer Loses Shine
- Gold Fever Fuels Feud
- Will This Takeover Plan Turn Into Gold?
Fool contributor Rich Smith holds no position in any company mentioned in this article.
