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Goldcorp Inc. would consider spinning off Osisko Mining Corp.’s exploration assets into a separate company as a way to sweeten its unsolicited offer for the smaller gold miner, people familiar with the matter said.
Montreal-based Osisko has rejected Goldcorp’s $3-billion cash and stock offer and is courting a range of suitors for its large Canadian Malartic mine in Quebec.
With a spinoff, Osisko shareholders would not only get a stake in the much larger Goldcorp but also retain ownership in some assets with growth potential, such as Osisko’s deposits in Ontario’s Kirkland Lake area.
Getting a friendly deal would ensure that Goldcorp locks up an asset it has coveted for more than five years before Osisko signs up to sell to another bidder. It is not just a rival bidder that Goldcorp has to consider. There is the possibility that Osisko shareholders simply say no.
“In the absence of a potentially higher offer price, we expect that Osisko shareholders may elect the “go-it-alone” route,” analysts at Canaccord Genuity said in a recent report.
Time is running out for Osisko. Goldcorp will get access to Osisko’s confidential data by April 1 and will be allowed to take up and pay for any shares tendered to its bid by mid-April if Osisko does not find a white knight.
Osisko’s Canadian Malartic would give Goldcorp an additional nine million ounces of gold reserves. The mine has been in Goldcorp’s chief executive Chuck Jeannes’ sights since 2008.
In the past, Goldcorp has succeeded in buying companies and spinning off their non-core assets into separate entities.
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