Goldcorp Sees No Rival for Osisko in ‘Changed’ Industry

Goldcorp Inc. (G) Chairman Ian Telfer doesn’t expect anyone to top his company’s hostile C$2.82 billion ($2.53 billion) bid for Osisko Mining Corp. (OSK) as rival producers remain deal-shy following writedowns on past takeovers.

“The competitive landscape has changed dramatically, it’s just gone away,” Telfer, 68, said today in an interview at Bloomberg’s Toronto office. Goldcorp, the second-largest gold producer by market value, doesn’t want to bid against itself, he said. “We don’t see a need to change our price.”

Goldcorp’s cash-and-stock bid for Osisko is currently valued at C$6.42 a share, 13 percent less than Osisko’s stock price, suggesting investors anticipate a higher offer.

Goldcorp’s bid represented a 15 percent premium to Osisko’s shares when it was announced Jan. 13. While that looks small compared with past deals in the industry, it’s probably close to the sort of premiums gold investors should expect in the new environment, Telfer said today. Of 91 gold-mining deals bigger than $200 million in the last 10 years, more than half had premiums paid of more than 25 percent, according to data compiled by Bloomberg.

“The world has changed,” Telfer said. “These high premiums that many people paid in 2006, ’07, ’08 are going away, and have gone away.”

Photographer: Galit Rodan/Bloomberg

Ian Telfer, chairman of Goldcorp Inc., speaks during an interview in Toronto, Ontario, Canada, on March 25, 2014. Close

Ian Telfer, chairman of Goldcorp Inc., speaks during an interview in Toronto, Ontario,... Read More

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Photographer: Galit Rodan/Bloomberg

Ian Telfer, chairman of Goldcorp Inc., speaks during an interview in Toronto, Ontario, Canada, on March 25, 2014.

Osisko has rejected the offer as too low and is looking for alternatives. The Montreal-based company, which operates the Canadian Malartic operation in Quebec, has signed confidentiality agreements with “lots” of interested parties and may also continue as a standalone entity, Osisko CEO Sean Roosen said in a March 20 interview.

Osisko rose 2.2 percent to C$7.41 at 4 p.m. in Toronto. The shares have increased 43 percent since the trading day before the Goldcorp bid was announced.

Barrick Gold Corp. (ABX), based in Toronto, is the largest gold producer by sales and market value.

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Steven Frank

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