MONTREAL – Osisko Mining Corp. (TSX:OSK) is urging shareholders to sit on the sideline while its board continues the search for an alternative to an ongoing hostile takeover play from Goldcorp Inc.
Goldcorp (TSX:G) has extended its hostile deadline for accepting the offer until March 21 but Osisko noted early Tuesday morning that its adversary is prevented from buying more shares until April 15.
Montreal-based Osisko also repeated its opposition to Goldcorp’s bid doesn’t adequately recognize the significant potential for its Canadian Malartic mine in Quebec or risk inherent with Goldcorp’s stock.
Under terms of the offer, Osisko shareholders are entitled to receive 0.146 of a Goldcorp common share plus $2.26 in cash for each Osisko common share.
Osisko’s shares closed down five cents at $7.43 on Monday, while Goldcorp shares fell 33 cents to $29.64, making the current implied value of the offer about $6.59 per share.
The price of gold and share prices for many gold producers have risen in recent weeks but Osisko shares have traded well above the implied value of the Goldcorp offer since the bid was first announced.
Earlier this month, litigation between the two companies was resolved when, among other conditions, Goldcorp. agreed not to take up and pay for any Osisko shares under its offer until April 15.
Other terms of the settlement in the hostile takeover bid by the senior gold miner included an agreement by Osisko to waive its shareholder rights plan by April 14.
It also agreed to provide Goldcorp with access to due diligence materials starting April 1, or earlier, if Osisko signs a deal with another bidder, a process which it is actively pursuing.