Goldcorp makes higher offer for Osisko, says it tops Yamana bid
posted on
Apr 10, 2014 11:55AM
gold royalty company - 5% NSR on Malartic.
(Adds interview with Osisko CEO, details on competing offers)
By Allison Martell
TORONTO, April 10 (Reuters) - Goldcorp Inc hiked its hostile takeover offer for smaller Canadian gold miner Osisko Mining Corp to about C$3.6 billion ($3.3 billion) on Thursday as it sought to top a complex white knight bid from Yamana Gold Inc.
Vancouver-based Goldcorp, the world's second-biggest gold miner by market value, raised its offer to C$7.65 a share for Osisko, which has one producing gold mine, Canadian Malartic in Quebec. Goldcorp's first offer, made in January, had worked out to C$5.95 per share.
Osisko shares were up 2.8 percent at C$7.76 in early trading in Toronto.
Osisko earlier this month unveiled a deal with Canadian Gold miner Yamana for 50 percent of its assets, which it said valued Osisko at about C$3.3 billion, or C$7.60 per share.
"This is a very strong offer to Osisko shareholders," said Goldcorp Chief Executive Chuck Jeannes at the company's investor day. He emphasized that the value of the Yamana deal is uncertain, calling Goldcorp's offer "clean, simple and straightforward".
The arrangement with Yamana would see Osisko's assets transferred to a partnership owned 50-50 by a new Osisko and Yamana. The deal would be financed in part by debt and a new streaming deal. Osisko shareholders would get C$2.194 in cash, 0.2119 of a Yamana share and a new common share of Osisko for each share they own.
The Yamana offer's value depends on the price at which the new Osisko shares would trade, a level that is difficult to forecast precisely. Veritas Investment Research analyst Pawel Rajszel estimated the deal's value at C$7.20 per share on April 3, while analysts at RBC Capital Markets pegged it at C$7.26 on Thursday.
Osisko Chief Executive Sean Roosen said that given a rise in the price of gold, the Yamana deal may now be worth something closer to C$7.65 a share.
"They maybe made it a matching bid, but it's far from being a superior bid at this point, in my view," he told Reuters. "But we'll take it to the special committee with our advisers, and we'll review it."
Goldcorp's raised offer comes two days after Roosen told Reuters that it would be tough for Goldcorp to trump Yamana Gold's offer.
Goldcorp said on Thursday it would offer 0.17 of a Goldcorp share and C$2.92 in cash for each Osisko share. The offer represents a premium of 1.3 percent to Osisko's closing price of C$7.55 on Wednesday on the Toronto Stock Exchange.