CANADIAN precious metals company Osisko Mining has formally rejected a “hostile” takeover bid by fellow Canadian gold producer Goldcorp, labelling the move ‘opportunistic” and “inadequate”.
In mid January, Vancouver-based Goldcorp announced it had placed an offer to acquire all outstanding common shares from Osisko, filing a takeover bid circular document with Canadian securities regulators and the US Securities Exchange Commission.
Under the terms of the offer, Osisko shareholders would have received 0.146 of a Goldcorp common share, plus CAD$2.26 in cash for each Osisko common share tendered. The offer valued Osisko at CAD$2.6 billion in total.
Goldcorp’s offer was widely reported to be the one of the biggest mining sector deals in more than a year, despite the softened global outlook for gold prices.
However, Quebec-based Osisko rejected the offer less than a week later, stating Goldcorp’s offer was “financially inadequate” and “not in the best interests of Osisko”.
Osisko’s board of directors unanimously urged its shareholders not to tender their Osisko shares.
“Tendering Osisko shares to the Goldcorp offer before the board of directors and its advisors 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 company stated in its rejection announcement.
“The current Goldcorp offer implied a meagre 15 per cent premium at the time of announcement and is significantly less today.”
Analysts suggested Goldcorp raise its offer if it wanted to close the deal. Osisko’s main asset is the Canadian Malartic gold mine in northern Quebec, which had its first production in May 2011.
Across its 16-year mine life, Canadian Malartic is expected to produce between 500,000 and 600,000oz of gold per year.