Franco-Nevada and Gold Wheaton Agree to Friendly Business Combination

Franco-Nevada (TSX:FNV)  and Gold Wheaton (TSX:GLW) have announced that they have agreed to a friendly business combination under which, Franco-Nevada will acquire Gold Wheaton for approximately C$830 million in cash and shares.

The press release is quoted as saying:

Under the terms of a binding letter agreement, the transaction will be structured as a Plan of Arrangement, and Gold Wheaton’s common shareholders will receive C$5.20 per share, payable 60% in shares and 40% in cash. This represents a premium of 19% to the closing price of Gold Wheaton’s shares on the TSX on December 10, 2010, a 23% premium based on the 20-day volume weighted average trading price of Gold Wheaton’s shares on the TSX, and a 35% premium to the closing price of Gold Wheaton’s shares on November 9, 2010 (C$3.84), the day before Quadra FNX Mining Ltd. (“Quadra FNX”) publicly indicated that its 34.5% block of Gold Wheaton shares was a non-core asset.

Dave Harquail, President and CEO of the Company, says:

The acquisition of Gold Wheaton materially increases the exposure and leverage of Franco-Nevada shareholders to increasing gold, platinum and palladium prices.  We expect this acquisition to be accretive to all per share metrics and the transaction adds the Quadra FNX Sudbury footwall deposits as a further cornerstone asset.  As the leading gold royalty company, Franco-Nevada continues to deliver value to our shareholders through accretive growth transactions.”

To access the full release, click here.