Osisko Mining formally rejects Goldcorp's $2.6B hostile takeover offer
MONTREAL - Osisko Mining Corp. (TSX:OSK) said Monday that shareholders should give its board time to find an alternative to Goldcorp's hostile $2.6-billion takeover offer, which it called opportunistic and inadequate.
The gold miner, which said it was working with its advisers including talks with third-parties regarding "strategic alternatives," urged its shareholders not to tender their stock to the Goldcorp 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 company said in a statement.
Osisko shares have traded well above the $5.95 implied value of the Goldcorp offer since the stock-and-cash proposal was first announced last week.
Analysts have suggested that Goldcorp (TSX:G) will have to raise its offer if it wants to close the deal.
Osisko's shares were unchanged at $6.47 on the Toronto Stock Exchange, while Goldcorp shares closed up 42 cents at $25.85.
Osisko's main asset is the Canadian Malartic gold mine in northern Quebec where it has been ramping up operations since its first commercial production in May 2011.
Goldcorp chief executive Chuck Jeannes has said Canadian Malartic would rank among his companies' best operations if the takeover is successful.
Osisko said the Goldcorp offer "fails to recognize the strategic value" of Canadian Malartic and the company's other projects under development in Canada.
"Canadian Malartic was developed, built, commissioned and ramped up by Osisko over the past 10 years and would be extremely difficult, time-consuming and costly to replicate," the company said.
"The Goldcorp offer has been opportunistically timed to occur before Canadian Malartic enters what Osisko expects will be its most productive years."
Osisko reported Monday that its fourth-quarter gold production totalled 137,321 ounces at estimated cash costs of $713 per ounce. That compared with 101,544 ounces at cash costs of $833 per ounce in the fourth quarter of 2012.
Gold production last year totalled 475,277 ounces at estimated cash costs of $760 per ounce, compared with 388,478 ounces at cash costs of $849 per ounce for 2012.
Goldcorp was once one of the largest shareholders in Osisko, but sold its 10.1 per cent stake in the company in 2011 for $13.75 per share for a total of about $530 million.
Since then, the big gold producer said it had been in regular discussions with Osisko until late last year.
Osisko said Monday that Goldcorp made what it called "highly conditional and non-binding proposals" in November 2008, April 2009 and September 2009.
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