Back to top

Analyst Blog

Goldcorp Inc. (GG - Analyst Report) 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 gold reserves.

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 attractive.

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 (ABX - Analyst Report), Newmont Mining Corporation (NEM - Analyst Report) and Freeport McMoRan Copper & Gold (FCX - Analyst Report), is expected to release its fourth-quarter 2013 results on Feb 13. Goldcorp currently carries a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
GTT COMMUNI… GTT 11.65 +4.11%
ALLERGAN IN… AGN 161.82 +3.99%
CLAYTON WIL… CWEI 117.06 +3.73%
GREENBRIER… GBX 69.63 +2.37%
RF MICRO DE… RFMD 12.02 +2.04%