‘You can forgive, but you don’t forget’: Goldcorp-Osisko friendly deal unlikely – by Nicolas Van Praet (National Post – February 19, 2014)

The National Post is Canada’s second largest national paper.

MONTREAL – The relationship between the management of Goldcorp Inc. and Osisko Mining Corp. has become so strained it’s difficult to imagine the two companies ever doing a friendly deal if Goldcorp’s current unsolicited bid fails.

For four years leading to the fall of 2013, the miners held enough on-again, off-again merger talks to develop a certain comfort with each other. A two-year confidentiality agreement under which they most recently shared private information had the sole purpose of evaluating a negotiated takeover.

But things soured after Goldcorp concluded that Osisko was no longer negotiating in good faith. Goldcorp went hostile with a $2.6-billion offer on Jan.14, with Osisko chief executive Sean Roosen getting less than 30 minutes of warning. Osisko countered with a lawsuit that alleges Goldcorp misused confidential information. It is asking the Quebec Superior Court to block the bid.

“Obviously we were not anticipating the hostile takeover given what we understood of the relationship and the effort and time that we were putting into that,” Mr. Roosen said in an interview Tuesday. “And you can forgive, but you don’t forget.”

Asked if Osisko could ever seek to work out a friendly deal with Goldcorp, Mr. Roosen said: “I don’t think we have much to say to Goldcorp at this point in time. I mean their behaviour has been less than ethical from the way that we see it.”

His comments came as Osisko published fourth quarter earnings of $10.5-million or 2¢ per share on record gold production of 137,321 ounces. Operating cash flow was $72.5-million on 4.6 million tonnes of tonnage processed. Osisko’s main asset is the Canadian Malartic mine in Quebec.

The miner’s lawsuit against Goldcorp will go to trial March 3. The legal battle centres on whether there was an understanding in place between the two companies to extend the confidentiality agreement’s standstill clause, which expired on Oct.16. The standstill prevented Goldcorp from using sensitive information to make a hostile takeover bid.

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