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Goldcorp says ‘significant number’ of Osisko investors back hostile bid

Goldcorp president and CEO Chuck Jeannes delivers a speech at the annual general meeting held at the Pan Pacific Convention centre in Vancouver, British Columbia May 18, 2011.

© Ben Nelms / Reuters/REUTERS

Goldcorp Inc. says a "significant number" of Osisko Mining Corp. shareholders support its $2.6-billion hostile offer to take over Osisko and that the targeted company appears to have nothing to offer investors as an alternative.

Vancouver-based Goldcorp made the statements in a news release Thursday responding to Montreal-based Osisko's launch of legal action in Quebec Superior Court on Wednesday to block the bid.

Osisko also alleges that Goldcorp misused confidential information it got in on-and-off merger talks going back more than five years.

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"Goldcorp's offer reflects the current market environment for gold and gold equities and provides a strong premium based on any reasonable valuation metric," Goldcorp president and chief executive officer Chuck Jeannes said.

"Osisko has communicated its intention to explore value-maximizing alternatives but without new information their only strategy appears to be to wait and hope for an improved valuation."

Goldcorp's CEO also says the meetings with "a significant number" of Osisko shareholders indicate there is "strong support for this business combination."

Goldcorp also said Thursday that the Competition Bureau has indicated it does not intend to challenge the gold miner's move to acquire its smaller rival. The company said it has obtained an advance ruling certificate from the antitrust watchdog, removing one of the hurdles it faces with its bid.

Goldcorp is offering a 15 per cent premium based on the closing prices of Osisko and Goldcorp on the Toronto Stock Exchange on Jan. 10, a premium that Osisko says is considerably lower than those in similar mining transactions.

Osisko shares are trading at $6.89 a share, above Goldcorp's stock and cash offer of $5.95 per share as Osisko's CEO Sean Roosen looks for an alternative.

Osisko's main asset is its low-cost Canadian Malartic mine in northwest Quebec, one of the biggest precious metal mines in Canada, boasting 10.1 million ounces of gold reserves.

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In its rebuttal released Thursday, Goldcorp also says there is no new information contained in Osisko's directors' circular filed on Wednesday as well as other public disclosures.

"No new information has been presented that would change Goldcorp's view that its offer is full and fair," said Goldcorp in its news release Thursday.

Osisko's board has unanimously recommended that shareholders reject Goldcorp's bid.

Mr. Roosen also said earlier this week that Osisko will deliver more value to shareholders as a stand-alone company than if it agrees to fold its Canadian Malartic mine into Goldcorp's suite of mines in the Americas.

With a file from Reuters

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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