(Adds comments from Goldcorp CEO,valuation details. Updates
By Allison Martell and Nicole Mordant
TORONTO/VANCOUVER, April 10 Goldcorp Inc
raised its hostile takeover offer for Osisko Mining Corp
on Thursday, squeaking above a white knight bid by
Yamana Gold Inc and heightening a bidding war that has
helped inject life into a depressed gold mining sector.
Vancouver-based Goldcorp, the world's second-biggest gold
miner by market value, said early on Thursday it increased its
offer for Osisko by some 38 percent to about C$3.6 billion ($3.3
billion), or C$7.65 a share.
Osisko is a smaller Canadian gold miner with one producing
mine, Canadian Malartic in Quebec. The mine is an attractive
asset as it is large and low-cost and located in a stable
Goldcorp shares fell nearly 4 percent following the news,
reducing the value of its cash-and-stock bid to around C$7.47 a
share. Still, the offer remained around 4 percent higher than
Yamana's cash-and-shares offer, based on analysts' estimates.
Yamana, another Canadian gold miner, launched a complex
offer for 50 percent of Osisko's assets last week. It said at
the time that its offer was valued at C$7.60 a share although
analysts have pegged it lower than that.
Some Osisko shareholders said the new Goldcorp bid was no
Goldcorp "haven't done that knockout bid where they forced
me to tender," said Charles Oliver, senior portfolio manager at
the Sprott Gold and Precious Minerals Fund, which has C$214
million of assets under management. Osisko was the fund's
second-biggest holding at the end of March.
Oliver, describing the Yamana deal as "a little complex",
said he did not plan to tender his Osisko stock to either offer,
preferring Osisko as a standalone company.
Osisko shares closed 0.5 percent higher at C$7.58 on the
Toronto Stock Exchange on Thursday. Goldcorp's were down 3.9
percent at C$26.78, and Yamana's were down 1.7 percent at
The fight for Osisko is the first major takeover tussle in
the Canadian gold industry in more than a year. Dealmaking dried
up after many miners wrote down the value of billions of dollars
of assets that they had purchased at sky-high prices as the
bullion price ran up in the last decade.
GOLDCORP DOESN'T RULE OUT RAISING BID
Yamana Chief Executive Officer Peter Marrone said in an
emailed statement that Goldcorp's raised bid "validates a view
that we were modest and even conservative in our initial view of
the value of new Osisko".
He did not say if Yamana would consider raising its bid.
Goldcorp CEO Chuck Jeannes said his company's raised offer
was full and fair but he did not rule out raising the bid if
Yamana came back with a higher offer.
Speaking to reporters in Toronto, he said Goldcorp no longer
sees room for a friendly transaction with Osisko.
The arrangement with Yamana would see Osisko's assets
transferred to a partnership owned 50-50 by a new Osisko and
Yamana. The deal would be financed in part by debt and a new
streaming deal. Osisko shareholders would get C$2.194 in cash,
0.2119 of a Yamana share and a new common share of Osisko for
each share they own.
The Yamana offer's value depends on the price at which the
new Osisko shares would trade, a level that is difficult to
forecast precisely. Veritas Investment Research analyst Pawel
Rajszel estimated the new Osisko shares to be worth C$2.99 on
April 3, while analysts at RBC Capital Markets pegged them at
C$3.03. Yamana and Osisko have put the value at C$3.35 a share.
"(Goldcorp) maybe made it a matching bid, but it's far from
being a superior bid at this point, in my view," Osisko CEO Sean
Roosen told Reuters. "But we'll take it to the special committee
with our advisers, and we'll review it."
Goldcorp's raised offer comes two days after Roosen said
that it would be tough for Goldcorp to trump Yamana Gold's
Goldcorp said it would offer 0.17 of a Goldcorp share and
C$2.92 in cash for each Osisko share. Before the Toronto Stock
Exchange opened for trading on Thursday the offer represented a
premium of 1.3 percent to Osisko's closing price of C$7.55 on
"It's a dime more than Yamana's offer. Goldcorp is not
taking this thing seriously and I am disappointed in them," said
John Kinsey, a portfolio manager at Caldwell Securities, which
owns a small position in Osisko's shares.
He said he wanted to see a bid at around C$8 a share.
Goldcorp said it was dropping its minimum tender threshold
to 50.1 percent from 66.7 percent, and extending the expiration
date of its offer to April 22.
Goldcorp's first offer, made in January, had worked out to
C$5.95 per share.
(With additional reporting by Ashutosh Pandey in Bangalore;
Editing by Savio D'Souza, Jeffrey Hodgson and Peter Galloway)