November 26, 2012 / 9:01 PM / in 5 years

Osisko buys potential rival bidder Agnico's stake in Queenston

Nov 26 (Reuters) - Gold miner Osisko Mining Corp, which has offered about C$550 million for Queenston Mining Inc , said it will buy Agnico-Eagle Mines Ltd’s 9.2 percent stake in Queenston, removing a potential rival bidder.

Agnico-Eagle, Queenston’s fourth-largest shareholder, will sell its stake for about C$42.3 million ($42.51 million). At least one analyst had said the company could be interested in making an offer for Queenston.

Queenston shares fell as much as 7 percent to C$5.03 as the agreement between Osisko and Agnico-Eagle lowered the chances of a bidding war.

“Obviously people were thinking if there was another party that was likely to bid. Agnico was probably the obvious contender,” Queenston spokesman David Donovan told Reuters.

He declined to say if the company has received any other bids.

Agnico-Eagle will receive $5.43 for each Queenston common share, Osisko said in a statement on Monday.

Osisko said earlier this month that it will buy Queenston to gain access to the Upper Beaver project in Ontario’s Kirkland Lake region.

Shares of Agnico-Eagle were up about 2 percent at C$56.47 while Osisko shares fell 2.4 percent to C$8.39 in late afternoon trade on the Toronto Stock Exchange on Monday.

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