The National Post is Canada’s second largest national paper.
MONTREAL/TORONTO – Sean Roosen never wanted to sell Osisko Mining Corp. The chief executive of Quebec’s biggest home-grown miner has said repeatedly that Goldcorp Inc. ambushed him with a hostile offer before he even got the chance to prove what kind of money his main production asset, the Malartic gold mine, could make for investors.
So now that he’s done his duty in perhaps extracting the most he can for Osisko with a friendly $3.9-billion tag-team offer from Yamana Gold Inc. and Agnico-Eagle Mines Ltd., he’s lashing out at the Canadian system that led to this outcome in the first place.
“You’ve got a regulatory regime here that is set for predatory behaviour,” Mr. Roosen said in an interview Wednesday. He said rules requiring TSX-listed bidders to win approval from their own shareholders for an acquisition being paid for with a new share issue equal to more than 25% of the current float favours larger companies. “All the bigger companies basically have free range to rape and pillage.”
The mining executive certainly isn’t the first person to criticize Canada’s bidder-friendly takeover rules. A veritable hoard of high-profile people have pointed out the shortcomings of the regulatory regime, which makes it nearly certain that a company will get sold once it is put into play. But few have said it in terms quite so stark.
“The weak regulatory process in Canada has set in motion aggressive behaviour and created a very corrosive environment for shareholders who own growth companies like Osisko,” Mr. Roosen said. “A company in perfectly good health gets put in play for a 15% premium and there’s almost no way to protect it on a standalone basis. This is the weakness of the Canadian mentality. We’ve got to redo all of our regulatory process here.”
In February, Mr. Roosen called Osisko “the posterchild” for a Quebec-based miner, noting the company was funded by the Quebec government in its early days and remains an example of successful resource investment and local enterpreneurship. Now he says the company is the posterchild for what’s wrong with Canadian regulation.
The most significant defence Canadian companies currently have in the face of an unwanted takeover bid is that of a shareholder rights plan. These so-called “poison pills” give existing shareholders a chance to buy shares at a discount and thereby dilute shares held by the suitor and make a takeover more difficult and expensive. The pills are limited in duration, unlike in the United States where they can, in theory, last forever.
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