Goldcorp Inc. agreed to settle a lawsuit filed by Osisko Mining Corp., the gold producer it’s trying to acquire for C$2.96 billion ($2.67 billion), and said it put its hostile offer on hold.
As part of the agreement, Osisko agreed to waive its shareholder-rights plan, and will allow Goldcorp full access for due diligence by April 1, Goldcorp said today in a statement. In exchange, Vancouver-based Goldcorp agreed not to take up and pay for shares tendered in the takeover bid before April 15 unless Osisko announces a transaction with another party.
The agreement “indicates slightly more cooperation between the two companies,” Michael Parkin, a Toronto-based analyst at Desjardins Securities Inc., said in a note today. “With access to the data room, Goldcorp could potentially justify an increase to its bid following receipt of new information.”
Osisko rose 6.4 percent to C$7.50 at the close in Toronto, 11 percent more than the current value of Goldcorp’s cash-and-stock offer.
Osisko, based in Montreal, had rejected Goldcorp’s Jan. 13 offer as too low, and filed the suit in Quebec Superior Court, arguing Goldcorp had misused confidential data from previous talks.
The two companies have held negotiations about a transaction at various times since 2008 and signed confidentiality pacts in 2008 and 2012, according to separate filings from Goldcorp and Osisko.
Osisko’s only producing asset is the Canadian Malartic operation in Quebec, which Goldcorp Chief Executive Officer Chuck Jeannes has said would rank among his company’s top mines by free cash flow, output and net asset value.
Osisko, which is looking at alternatives to the Goldcorp offer, sees a “clear case” to remaining independent, Chief Executive Officer Sean Roosen said in a Feb. 19 interview.