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The takeover battle between Goldcorp Inc. and Osisko Mining Corp. is heating up. But not for reasons that have anything to with the terms of the actual bid.
The two sides are set to face off in the Quebec Superior Court this week over Osisko’s claim that Goldcorp misused confidential information when it launched the $2.6-billion hostile offer in January.
The court case, which begins Monday in Montreal, centres on whether the two companies had a verbal standstill agreement in place when Osisko disclosed private data in a meeting last year. The trial is set to last for three days and both sides expressed confidence they will win. Not surprisingly, Goldcorp dismissed the lawsuit as a stalling tactic while Osisko said it will shed light on nefarious actions by Goldcorp.
Outside of court, a more complicated battle is brewing as both sides talk up their Quebec credentials in an attempt to win the hearts and minds of the province. Osisko is the largest Quebec-based mining company and owns the giant Canadian Malartic mine in the province. Goldcorp, based in Vancouver, plans to produce first gold from its US$1.8-billion Eleonore mine in Quebec later this year.
The timing of the bid is tricky for Goldcorp, because it comes amid growing rhetoric in Quebec that local companies need to be protected from hostile takeovers and that the loss of head offices poses an economic threat to the province. A special task force of Quebec business leaders reached those conclusions in February, and the government vowed to introduce legislation that would make such takeovers much more difficult.
Goldcorp’s bid would not be subject to any of the new rules being proposed, but it has highlighted the opposition to hostile offers within the province. The Board of Trade of Metropolitan Montreal expressed concerns about Goldcorp’s bid, and there have not been any outspoken voices in Quebec supporting it.
“We certainly don’t believe this [offer] is any kind of a tragedy for Quebec,” Goldcorp chief executive Chuck Jeannes said in an interview.
For the rest of this article, click here: http://business.financialpost.com/2014/03/02/goldcorp-osisko-battle-heats-up-in-quebec-as-court-case-begins-monday/