Goldcorp challenges Osisko to find suitor willing to beat its hostile takeover offer
Goldcorp Chairman Ian Telfer challenged takeover target Osisko Mining to find a suitor willing to challenge his company's hostile offer worth CAD 3bn (USD 2.692bn), reported The Globe and Mail on 26 March.
Telfer said in an item from the newspaper's Report on Business section not only that Montreal, Quebec-based Osisko has had more than enough time to find a white knight suitor, but also that he doesn't believe that "anyone" will "come in."
According to the report, it has not been north of two months since Goldcorp announced its unsolicited offer, and Osisko is now running out of time. By 1 April, Vancouver, British Columbia-based Goldcorp will be permitted to comb over Osisko's books on its Canadian Malartic gold project in Quebec. Goldcorp, by the middle of April, will be allowed to pick up any stock tendered to its offer.
The report noted that analysts have said that Goldcorp has to table a higher bid if it wants to be successful. Telfer, however, said in a 26 March report from The National Post that it makes no sense to raise the bid since there is no other suitor in the mix. He noted in the report from the newspaper's Financial Post section that there is no "auction" when there is only a single bidder.
Unnamed sources cited in The Globe and Mail report, meanwhile, indicated that Goldcorp, in a bid to win over Osisko shareholders, is mulling over the possibility of holding on to the Canadian Malartic mine and spinning off Osisko's exploration holdings into a separate corporate entity.
However, Osisko CEO Sean Roosen scoffed at the notion of spinning off Osisko's exploration assets, arguing that it would be akin to exchanging "a Ferrari" for "a Buick."
Telfer, whose company has attempted to acquire the Canadian Malartic asset for over five years, said in the report that Goldcorp will probably opt to extend its offer through to 15 April if it's satisfied after the due diligence stage. He said Goldcorp's current bid fully reflects the "value we" currently "see."
According to the report, Goldcorp will benefit from the fact that a lot of the bigger mining companies are not at this time in the position to pursue a large acquisition. For example, Barrick Gold and Kinross Gold, both of which have had to take substantial asset writedowns for previous acquisitions, are unlikely to step forward. Furthermore, analysts said in the report that Agnico Eagle Mines, which previously considered potentially buying Osisko, would find it difficult to go toe-to-toe with bigger rival Goldcorp.
Telfer said in the report that Goldcorp very much covets the Canadian Malartic project, but the company will only pay as much as "makes sense." He added that Goldcorp is open to walking away if need be.
Source The Globe and Mail, National Post