) announced its plans to acquire all of the outstanding common
shares of Osisko Mining Corporation for about C$2.6 billion ($2.4
billion) in cash and shares. Under the terms of the unsolicited
offer, Goldcorp will offer Osisko shareholders 0.146 of Goldcorp
common share and C$2.26 in cash for each Osisko common share. The
offer has been scheduled to be open till Feb 19.
Based on Goldcorp's closing share price of C$25.29 on Toronto
Stock Exchange (TSX) on Jan 10, the total consideration offered
to Osisko shareholders was C$5.95 per common share. This
represented a premium of 28% over the 20-day volume-weighted
average share price of Osisko from all trading on Canadian
exchanges for the period ending on Jan 10, and a premium of 15%
over Osisko's TSX closing share price on the same day.
According to Goldcorp, the main attractions of the deal are
the large ten-million-ounce gold reserve. With Goldcorp's
financial and technical resources, the gold reserve will support
a long mine life and low all-in sustaining costs, and the
immediately accretive per-share metrics, including free cash
flow, operating cash flow, net asset value, gold production and
The deal will also be beneficial to Goldcorp as it will be
provided with immediate free cash flow after the completion of
the construction of its key growth projects at Cerro Negro,
Eleonore and Cochenour over the next eighteen months.
With the deal in place, Goldcorp will get opportunities to
leverage its existing investments in Quebec and Ontario along
with corporate and regional synergies. Goldcorp's substantial
investment in the Province of Quebec, which is one of the best
mining jurisdictions in the world, makes the deal more
Osisko shareholders will be entitled to participate in
Goldcorp's monthly dividend. They will gain access to Goldcorp's
suite of low-cost mines and development projects, and can
participate in Goldcorp's strong production growth profile.
Goldcorp, a prominent mining company along with
Barrick Gold Corporation
Newmont Mining Corporation
Freeport McMoRan Copper & Gold
), is expected to release its fourth-quarter 2013 results on Feb
13. Goldcorp currently carries a Zacks Rank #3 (Hold).
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