Osisko brands Goldcorp’s $2.6bn takeover bid as ‘very low’ and 'opportunistic'

Osisko Mining Corp. (TSX:OSK) responded Wednesday to Goldcorp’s (TSX:G) (NYSE:GG) $2.6-billion hostile bid by saying the offer is “very low” and “opportunistic,” and that the door is open for new proposals.

In a brief but firm statement, the Montreal-based miner said it hired BMO Capital Markets and Maxit Capital LP as financial advisors, and that its board has set up a committee of five independent members to review alternatives for the company.

Goldcorp is after Osisko’s only operating mine and main asset in the province of Quebec. The Canadian Malartic mine is expected to produce more 500,000 to 600,000 ounces of gold per year over its 16-year mine life, according to its current owner.

In its takeover offer circular, the Vancouver-based gold giant revealed this is not the first time it attempts to get control of Malartic. In fact, it has been discussing a possible deal for Osisko since 2008, but the firm “has continually refused to either negotiate or engage in meaningful dialogue,” Goldcorp said.

Osisko shares have traded well above the $5.95 implied value of the Goldcorp offer since the stock-and-cash proposal was first announced Monday.

Analysts have suggested that Goldcorp will have to raise its offer if it wants to close the deal.

Goldcorp already has a gold project in Quebec – Éléonore, set to begin production later this year. But if its takeover offer over Osisko goes through, Goldcorp, which already is world's largest gold miner by market capitalization, would become the No. 1 gold producer in Quebec.

Image from Flickr Commons