Goldcorp must increase bid to win: Osisko CEO

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Osisko Mining Corp.'s chief executive said that Goldcorp Inc. would have to raise its hostile bid by at least $1.50 per share if it wants to top a friendly deal between Osisko and Yamana Gold Inc.

Vancouver-based Goldcorp is after Montreal-based Osisko for its large Canadian Malartic gold mine in Quebec. Its unsolicited bid is currently valued at $6.30 per share.

Meanwhile, a deal between Osisko, Yamana and two Canadian pension funds is valued at $7.57 a share.

Although analysts expect Goldcorp to increase its offer, the company's chief executive has repeatedly said he would not overpay for Osisko.

"They have laid down more rhetoric than Hulk Hogan in a wrestling match," Osisko's chief executive Sean Roosen said in an interview.

"I just don't see how they can go back to their shareholders and add $1.50 a share to this thing, which is pretty much what they would have to do," he said.

Goldcorp gained access to Osisko's confidential data last week. Its executives have suggested that they could sweeten their offer if they found more value within the Montreal miner.

The Yamana-pension fund bid has a higher value than Goldcorp's proposal.

"Everybody has unanimously agreed that this is far superior," said Mr. Roosen, after talking to his major shareholders.

He said that shareholders controlling more than 40 per cent of Osisko are supportive of the Yamana deal, but some of Osisko's shareholders do not like the Yamana arrangement either.

It is unknown whether the necessary two-thirds of Osisko's shareholders will tender to the Yamana-led bid.

Shareholders were initially confused by the arrangement, which splits Osisko's assets with Yamana and involves an injection of capital from two Canadian pension funds.

Under the terms of that proposal, Yamana would buy half of Canadian Malartic and Osisko's exploration assets. Osisko would keep the rest and continue to operate the gold mine.

But about 7 per cent of Osisko's future production from Canadian Malartic would be sold at a discount to pension fund Caisse de dépôt et placement du Québec, and Osisko shareholders would only have exposure to half of the precious metal mine.