Goldcorp Says It Tried to Talk to Osisko for 5 Years

Goldcorp Inc., which yesterday made a C$2.6 billion ($2.4 billion) unsolicited offer for Osisko Mining Corp., said the bid followed five years of “frustrated attempts” to engage in takeover talks.

The two companies signed confidentiality pacts in 2008 and 2012, Vancouver-based Goldcorp said today in a filing.

Goldcorp “made repeated and genuine attempts to discuss a mutually beneficial transaction with Osisko,” the company said in the filing. “Osisko has continually refused to either negotiate or engage in meaningful dialogue.”

Goldcorp is seeking control of Osisko’s Canadian Malartic operation in Quebec, which Chief Executive Officer Chuck Jeannes said yesterday would rank among the company’s top mines by cash-flow, production and net asset value. Gold mining companies lost about half their value last year amid the metal’s biggest decline in three decades, providing opportunities for producers looking to replenish their reserves and acquire more profitable mines.

Goldcorp said yesterday it would offer to pay Osisko holders 0.146 Goldcorp shares plus C$2.26 in cash per share. The company has arranged a $1.25 billion credit facility from Scotiabank to help fund the deal.

Multiple Offers

Osisko will consider Goldcorp’s announcement, as well as any formal offer that’s made, Osisko said yesterday in a statement. Osisko won’t comment further on future actions until it has completed its review.

Goldcorp made three offers to Osisko, in 2008 and 2009, all of which were rejected by the Montreal-based company, according to the filing. While discussions took place, Osisko refused to provide “essential” information Goldcorp needed to complete its due diligence, the company said.

Talks restarted and were terminated by Osisko a number of times during the past five years, most recently in November, Goldcorp said in the filing.

Goldcorp declined 2.6 percent to C$24.34 at the close in Toronto. Osisko fell 1 cent to C$6.23, 6.9 percent above the current offer value of C$5.83 a share.

Before it's here, it's on the Bloomberg Terminal.