Resources Heavy TSX Boosted By China Numbers; Takeover Saga Involving Osisko and Goldcorp Takes More Twists


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Canada stocks gained close to 140 points or 1% on Wednesday with the resources heavy index boosted by better than expected economic growth in China for the first quarter that raised the prospect of increased demand for Canadian commodities from that country.

All sectors were higher, led by Energy.

North American equity markets appeared to largely shrug off dovish comments from Bank of Canada Governor Stephen Poloz early in the day, then separate dovish comments from U.S. Fed Chairman Janet Yellen and later again the release of largely uninspiring comments within the Fed's latest Beige Book.

Story of the day once again involved Osisko Mining Corporation (OSK.TO) - easily the most actively traded with five times more of its stock changing hands than the next busiest - and its bigger rival and hostile suitor Goldcorp (G.TO, GG).

OSK jumped near 7% to 52 week high type levels.

Today, Osisko, Yamana Gold (YRI.TO, AUY) and Agnico Eagle Mines (AEM, AEM.TO) entered into an agreement that would see Yamana and Agnico Eagle jointly acquire 100% of Osisko's issued and outstanding common shares for total consideration of C$3.9 billion or C$8.15 per share. The total offer consists of approximately C$1 billion in cash, C$2.3 billion in Yamana and Agnico Eagle shares, and creation of a new company with an implied value of approximately C$575 million. Osisko will own shares of both Yamana and Agnico should the deal go ahead. A statement said the offer represents an 11% premium to the current Goldcorp hostile bid.

Just before that announcement, GOLDCORP said a notice is being delivered today to takeover target Osisko of an intention to nominate 11 for election to its board. All of the Goldcorp nominees other than Clement Pelletier, who is nominated for election as a director of Goldcorp at its upcoming annual and special meeting, are currently directors or officers of Goldcorp, which has been a hostile suitor of Osisko. On April 10, 2014, Goldcorp increased its previous offer to acquire all of the outstanding common shares of Osisko to C$7.65 per Osisko share for a total consideration of approximately C$3.6 billion.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

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