Canada's Osisko Mining Corp yesterday struck a deal to sell itself to Yamana Gold Inc and Agnico Eagle Mines Ltd for C$3.9 billion ($3.6 billion), in a deal aimed at blocking a hostile takeover from Goldcorp Inc.
The new deal is valued at C$8.15 a share, a premium of 11 per cent premium to the implied value of the sweetened bid made last week by Goldcorp. (See: Goldcorp sweetens bid for Osisko Mining to $3.3-bn)
Under the new deal, Osisko shareholders would receive C$2.09 in cash cash, 0.26471 of Yamana common share, 0.07264 of an Agnico Eagle common share, and one share of the new Osisko company called Spinco, with an implied value of approximately C$575 million, or C$1.20 per share.
The deal works out to Agnico Eagle and Yamana paying a combined C$1 billion in cash and around $2.33 billion in shares.
Upon closing, Yamana and Agnico Eagle will each own 50 per cent of Osisko, and will form a joint committee to operate the Canadian Malartic mine in Quebec. The partners will also jointly explore and potentially develop the Kirkland Lake assets, and continue the exploration at the Hammond Reef, Pandora, and Wood-Pandora properties.
The latest deal replaces the previously approved, complex transaction with Yamana, which involved Osisko selling 50 per cent of its assets to Yamana for $1.37-billion, and a cash infusion from two large Canadian pension funds - Canada Pension Plan Investment Board and Caisse de dépôt et placement du Québe. (See: Osisko Mining outlines $1.37-bn deal with Yamana Gold)
Osisko's flagship asset is Canadian Malartic in Quebec, one of the world's largest gold mines.
With over 10 million ounces of proven and probable reserves, Canadian Malartic is a world-class gold mine, with superior scale and costs relative to many of the producing assets held within the five largest North American domiciled gold producers.
Osisko's board has unanimously approved the latest Yamana-Agnico Eagle offer and will recommend that Osisko shareholders vote in favour of the deal.
Shareholders, including the directors and senior officers of Osisko, holding around 4.5 per cent of the company's stock have agreed to vote for the Yamana-Agnico Eagle offer.