Canadian gold miner Osisko rejects $2.37-bn bid from Goldcorp
21 January 2014
Canadian gold miner Osisko Mining Corp yesterday rejected a hostile C$2.6 billion ($2.37 billion) takeover bid from rival Goldcorp Inc, saying that the stock-and-cash offer is "financially inadequate and not in the best interests of Osisko."
Last week Vancouver-based Goldcorp offered 0.146 of its shares, plus $2.26 in cash, for each Osisko share, valuing the company at $5.95 a share, a 15 per cent premium over its 10 January closing price.
Osisko shares have since traded above the $5.95 implied value, and analysts have suggested that Goldcorp will have to raise its offer if it wants to close the deal.
Osisko said that Goldcorp's offer significantly undervalues its world-class Canadian Malartic mine, and its portfolio of high-potential projects in North America. ''The premium offered by Goldcorp, as well as the transaction multiples implied by the offer, are both significantly below the relevant precedents.''
Osisko also said that it was working with its advisers including talks with third-parties regarding "strategic alternatives," and urged its shareholders not to tender their stock to Goldcorp's bid.
"Tendering Osisko shares to the Goldcorp offer before the board of directors and its advisers have had an opportunity to fully explore all available strategic alternatives to the Goldcorp Offer may preclude the possibility of a superior alternative transaction emerging," the Montreal-based company said in a statement.
Goldcorp, which once held 10.1 per cent in Osisko, had tabled a highly conditional and non-binding 0.0661, 0.1805 and 0.22 Goldcorp shares for each Osisko share in November 2008, April 2009 and September 2009 respectively.
Osisko noted that these proposed or implied exchange ratios would currently translate into values per Osisko shares of around $1.78, $4.85 and $5.89, compared to Osisko's closing price of $6.47 on 17 January 2014.
Goldcorp sold its stake in Osisko in 2011 for $13.75 per share netting a total of around $530 million.
Osisko's flagship asset is Canadian Malartic in Quebec, one of the world's largest gold mines.
With over 10 million ounces of established 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.