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Goldcorp Commences Offer, Files Bid for Osisko

FCX NEM ABX GG

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Goldcorp Inc. (GG - Analyst Report) announced that it has commenced its offer to acquire all of the outstanding common shares of Osisko Mining Corporation. The company has filed offer and takeover bid circular and related documents (“Circular”) on Osisko's profile with the Canadian securities regulators. It has also furnished the circular to the United States Securities Exchange Commission.

As per the offer, Goldcorp will provide Osisko shareholders 0.146 of Goldcorp common share and C$2.26 in cash for each Osisko common share. 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. The offer will be open till Feb 19.

Goldcorp intends to send the circular to Osisko's shareholders following the receipt of the information. Goldcorp encourages Osisko's shareholders to go through the circular to know how to tender their Osisko shares to the offer.

Goldcorp recently announced its plans to acquire all of the outstanding common shares of Osisko for about C$2.6 billion ($2.4 billion) in cash and shares. 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. The shareholders 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).

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