Goldcorp ups its offer for Osisko Mining Corp.

April 11, 2014

The bidding war for Osisko Mining Corp. got more intense on April 10 when Goldcorp upped its bid for the Canadian company to about $C3.6 billion (US$3.3 billion).

Goldcorp said in a statement it will pay C$7.65 in cash and stock for each Osisko share. That’s about 19 percent more than its initial bid made in January.

Yamana Gold agreed April 2 to acquire 50 percent of Osisko’s assets in a deal that it said valued the whole company at C$7.60 a share, Bloomberg reported.

Osisko’s main assest, and the prize to the winner of the bidding war, is the Canadian Malarti operation. Goldcorp Chief Executive Officer Chuck Jeannes has said he would rank the Quebec project among his company’s top mines based on free cash flow, output and net asset value.

Goldcorp was granted access to complete due diligence on Montreal-based Osisko as part of a settlement of a lawsuit in which Osisko tried to block the offer.

“The recent completion of our due diligence process has confirmed the technical and financial merits of our decision to acquire Osisko,” Jeannes said in a statement.

Goldcorp said its latest offer comprises 0.17 of a Goldcorp share plus C$2.92 in cash for each Osisko share. The revised bid will expire April 22 and the minimum tender requirement is now 50.1 percent of Osisko’s shares.

Osisko rejected Goldcorp’s initial offer as too low. CEO Sean Roosen said that while his company will review the higher bid, Goldcorp’s proposal still wouldn’t give Osisko shareholders a direct stake in Canadian Malartic, unlike the Yamana deal.

In the Yamana deal, each Osisko share will be exchanged for C$2.194 in cash, 0.2119 of a Yamana share and a new Osisko share, which the companies said had an ascribed value of C$3.35 each. Using Yamana’s current share price the transaction values Osisko shares at C$7.58 apiece.

Under the accord with Yamana, the fourth-largest Canadian gold miner by sales, Osisko will keep its head office in Montreal and sell a portion of its future gold from Canadian Malartic to Caisse de Depot et Placement du Quebec, a pension fund. Osisko also agreed with the Canada Pension Plan Investment Board to increase a credit facility. The accords with the two pension funds will provide the miner with an additional C$550 million in funding.
 

 

Related article search: