Canada's Osisko Mining announced a partnership Wednesday with Yamana Gold and two pension funds in an apparent effort to thwart a hostile takeover bid by rival Goldcorp Inc.
The deal is valued at Can$1.67 billion (US$1.51 billion).
Yamana has agreed to buy a 50 percent stake in Osisko's mining and exploration assets for cash and shares valued at Can$7.60 (US$6.89) per Osisko share.
The offer is 10 percent higher than Osisko's closing share price on Tuesday, and 22 percent higher than Goldcorp's offer of Can$6.21 per share, based on Goldcorp's closing share price the same day.
Osisko also said it had agreed loans from the CPP Investment Board and the sale of gold from its Malartic mine with La Caisse de Depot et Placement du Quebec.
The surprise deal comes after Goldcorp announced in January a Can$2.6 billion (US$2.36 billion) cash-and-stock takeover bid for Osisko, which Osisko's board firmly rejected.
Goldcorp's offer is set to expire at the end of the week, and Desjardin Securities analyst Michael Parkin said it is unlikely the company will have enough time to present a revised bid by 5 p.m. (2100 GMT) Friday.
"Goldcorp gained access to Osisko's data room as of yesterday, April 1, which may be too recent to allow for a revised bid by Friday," he said.
Goldcorp received access to Osisko's books on April 1, after Osisko withdrew a lawsuit against Goldcorp in exchange for guarantees that Goldcorp delay its proposed tie-up until mid-April in order to allow Osisko time to find another suitor.
Goldcorp did not immediately respond to Osisko's move to partner with Yamana.
Osisko president Sean Roosen said in the statement: "We are extremely pleased today to announce this partnership with Yamana Gold.
"Since the middle of January our shareholders have been subjected to a low-value hostile offer. Today's announcement brings significantly greater value to our shareholders," he said.
Goldcorp is Canada's second-largest gold company after Barrick Gold, with a dozen mines operating in the Americas and several more in development.
Montreal-based Osisko's main asset is the Malartic gold mine in the Canadian province of Quebec, which started production in 2011.
Over its 16-year lifespan the mine is expected to produce 500,000 to 600,000 ounces of gold per year, according to Osisko.
Canadian-based Yamana operates gold mines throughout the Americas, including Brazil, Argentina, Chile and Mexico. It is ranked as one of the world's top 10 gold miners.
Canada’s Osisko Mining announced a partnership Wednesday with Yamana Gold and two pension funds in an apparent effort to thwart a hostile takeover bid by rival Goldcorp Inc.
The deal is valued at Can$1.67 billion (US$1.51 billion).
Yamana has agreed to buy a 50 percent stake in Osisko’s mining and exploration assets for cash and shares valued at Can$7.60 (US$6.89) per Osisko share.
The offer is 10 percent higher than Osisko’s closing share price on Tuesday, and 22 percent higher than Goldcorp’s offer of Can$6.21 per share, based on Goldcorp’s closing share price the same day.
Osisko also said it had agreed loans from the CPP Investment Board and the sale of gold from its Malartic mine with La Caisse de Depot et Placement du Quebec.
The surprise deal comes after Goldcorp announced in January a Can$2.6 billion (US$2.36 billion) cash-and-stock takeover bid for Osisko, which Osisko’s board firmly rejected.
Goldcorp’s offer is set to expire at the end of the week, and Desjardin Securities analyst Michael Parkin said it is unlikely the company will have enough time to present a revised bid by 5 p.m. (2100 GMT) Friday.
“Goldcorp gained access to Osisko’s data room as of yesterday, April 1, which may be too recent to allow for a revised bid by Friday,” he said.
Goldcorp received access to Osisko’s books on April 1, after Osisko withdrew a lawsuit against Goldcorp in exchange for guarantees that Goldcorp delay its proposed tie-up until mid-April in order to allow Osisko time to find another suitor.
Goldcorp did not immediately respond to Osisko’s move to partner with Yamana.
Osisko president Sean Roosen said in the statement: “We are extremely pleased today to announce this partnership with Yamana Gold.
“Since the middle of January our shareholders have been subjected to a low-value hostile offer. Today’s announcement brings significantly greater value to our shareholders,” he said.
Goldcorp is Canada’s second-largest gold company after Barrick Gold, with a dozen mines operating in the Americas and several more in development.
Montreal-based Osisko’s main asset is the Malartic gold mine in the Canadian province of Quebec, which started production in 2011.
Over its 16-year lifespan the mine is expected to produce 500,000 to 600,000 ounces of gold per year, according to Osisko.
Canadian-based Yamana operates gold mines throughout the Americas, including Brazil, Argentina, Chile and Mexico. It is ranked as one of the world’s top 10 gold miners.
