Goldcorp Offers To Buy Osisko Mining For About C$2.6 Bln

(RTTNews) - Canadian gold miner Goldcorp Inc. (GG, G.TO) said Monday that it plans to commence an offer to acquire smaller peer Osisko Mining Corp. (OSK.TO) in a cash and stock deal for about C$2.6 billion, or $2.38 billion. Goldcorp noted that on completion of the deal, it will be the largest gold producer in Canada's Quebec province.

Under the terms of the offer, Osisko shareholders will be entitled to receive 0.146 of a Goldcorp common share plus C$2.26 in cash for each Osisko common share held by them.

Based on Goldcorp's closing share price on Toronto Stock Exchange or TSX of C$25.29 on January 10, 2014, the total consideration offered to Osisko shareholders is C$5.95 per Osisko common share. The offer price represents a 15 percent premium to Osisko's TSX closing share price of C$5.17 on January 10, 2014.

Goldcorp noted that the deal will enable it to add Osisko's high-quality Canadian Malartic gold mine in the prolific Abitibi mining district of Québec, which has about 10 million ounces of gold reserves. According to Osisko, total proven and probable mineral reserves at the Canadian Malartic mine as at January 1, 2013 are estimated at 310.6 million tonnes.

The acquisition will also leverage Goldcorp's existing investments in Québec and Ontario, with opportunity for corporate and regional synergies.

The transaction will be immediately accretive to Goldcorp on key per-share metrics, including free cash flow, operating cash flow, net asset value, gold production and gold reserves.

Chuck Jeannes, Goldcorp President and Chief Executive Officer of Goldcorp said, "We are particularly pleased to be making a further substantial investment in the Province of Québec, one of the best mining jurisdictions in the world. With our world-class Éléonore project in Northern Québec due to commence production later this year, Goldcorp will be the largest gold producer in the province with the resources to continue building collaborative, long-term relationships while leveraging corporate and regional synergies."

Goldcorp noted that the offer will be open for acceptance until February 19, 2014, unless extended or withdrawn. The offer will be subject to customary conditions, including the acceptance by Osisko shareholders owning not less than 66 2/3 percent of Osisko shares outstanding on a fully-diluted basis.

The offer will not require the approval of Goldcorp's shareholders. Goldcorp has obtained a $1.25 billion non-revolving term credit facility from Scotiabank. The credit facility, together with the company's cash on hand of about $620 million and an undrawn credit facility of $2 billion, will be sufficient to fund the cash portion of the offer.

GG closed Friday's trading on the NYSE at $23.19. In Monday's pre-market trades, the stock is up $0.79 or 3.53 percent to $23.20.

OSK.TO closed Friday's trading on the TSX at C$5.17, up C$0.28 or 5.73 percent on a volume of 3.20 million shares.