Osisko harsh in its formal rejection of Goldcorp’s hostile bid – by Bertrand Marotte (Globe and Mail – January 20, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

MONTREAL — Osisko Mining Corp. has unveiled a lengthy and harshly worded formal rejection of Goldcorp. Inc.’s hostile $2.6-billion bid for its smaller rival.

Montreal-based Osisko’s board of directors is unanimously recommending that shareholders reject the offer Vancouver-based Goldcorp launched on Jan. 14, calling it “financially inadequate” and saying it “significantly undervalues” Osisko’s main asset, the Canadian Malartic gold mine in northwestern Quebec.

Osisko also says the timing of Goldcorp’s offer is opportunistic because it is just before Canadian Malartic enters what Osisko expects to be its most productive years.

Goldcorp is offering a “meagre 15%” premium based on the closing prices of Osisko and Goldcorp on the Toronto Stock Exchange on Jan. 10, one that is “substantially below the premiums paid in other relevant metals and mining transactions,” Osisko said in a news release Monday.

The cash and stock offer is also being offered at a discount to the current trading price of Osisko shares, the company adds.

The closing price of Osisko stock on Jan. 17 was $6.47, compared with an implied value of the Goldcorp bid of only $5.97, it said.

Contrary to Goldcorp’s claims that Osisko repeatedly rejected friendly offers to merge and refused to provide key information after a confidentiality agreement was signed in 2008, Goldcorp never produced a “credible proposal,” said Osisko.

“Instead, Osisko has been presented with highly conditional and on-binding proposals that offered inadequate premiums, and value propositions which did not warrant further consideration or engagement by Osisko.”

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2 Responses to Osisko harsh in its formal rejection of Goldcorp’s hostile bid – by Bertrand Marotte (Globe and Mail – January 20, 2014)

  1. Joseph Smith January 20, 2014 at 6:07 pm #

    Can everyone say “Karma”? I find it hillarious that when a mining company like Osisko is threatened with a take-over that they whine “lowball” and “opportunistic”.
    Take a look at the assets acquired by the larger compamies and invariably they were acquired through an “opportunistic” or “lowball” offer to a distressd junior or prospector, and were touted as “building shareholder value”.
    I seem to recall about 100 million in Queenstons bank account that investors put up to develop Queenstons Upper Beaver project and surrounding Kirkland Lake area properties. For the cost of a couple of ink cartridges and a box of paper Osisko basically printed up a bunch of stock to acquire Queenston and left Ontario with the bank account as a gift to the Malartic project. Of course this was building shareholder equity and not “opportunistic” or “lowballing”.
    The whole story is told in the fact that the directors only own 0.17% of the stock. …….Cry me a river….

  2. Joseph Smith January 20, 2014 at 10:17 pm #

    should read”…. only own 0.70% of the stock”………..