Tags: Osisko | gold | Quebec | mine

Agnico Joins Yamana Gold in $3.55 Billion Offer for Osisko

Wednesday, 16 Apr 2014 11:00 AM

Agnico Eagle Mines Ltd. and Yamana Gold Inc. agreed to jointly acquire Osisko Mining Corp. for C$3.9 billion ($3.55 billion), the latest twist in a battle for control of a Quebec mine that now involves three of Canada’s largest gold producers.

Yamana and Agnico’s cash-and-stock offer for Montreal-based Osisko is valued at C$8.15 a share, they said in a statement today. That trumps a hostile offer from Vancouver-based Goldcorp Inc. currently valued at about C$7.43 a share, according to data compiled by Bloomberg.

The fight for Osisko is focused on its Canadian Malartic gold mine, which Goldcorp Chief Executive Officer Chuck Jeannes has said would rank among his company’s top mines. The bidding war also marks a revival for gold-mining mergers and acquisitions. The biggest annual decline in the gold price in three decades has dragged down the valuations of producers and created opportunities for miners seeking to add capacity and replace reserves.

Canadian Malartic is valuable for its large gold deposit and because Quebec is an attractive jurisdiction for mining companies, according to Osisko CEO Sean Roosen.

Osisko rose 6.3 percent to C$7.89 at 10:17 a.m. in Toronto. Yamana fell 3 percent, Agnico Eagle dropped 5.8 percent and Goldcorp gained 1 percent.

Joint Operators

Yamana and Agnico, Canada’s fourth- and fifth-largest gold producers by sales respectively, will form a new company to buy Osisko and will jointly operate Canadian Malartic and some of the company’s exploration assets after the deal closes.

Under the offer announced today, for each Osisko share, investors will receive C$2.09 in cash, 0.07264 of an Agnico Eagle share and 0.26471 of a Yamana share. They will also get one share in a new company that will be spun out to hold certain Osisko assets, including a 5 percent net smelter royalty from output at Canadian Malartic.

In the event of another, superior offer, Osisko will pay Agnico and Yamana a termination fee of C$195 million.

Today’s deal replaces a transaction announced April 2 in which Yamana agreed to buy 50 percent of Osisko’s assets. The two companies said at the time that the deal valued Osisko at C$7.60 a share.

Goldcorp, the second-largest Canadian gold miner by revenue, responded April 10 by raising its hostile cash-and-stock bid and lowering the minimum tender condition to 50.1 percent of Osisko shares. Its current offer is set to expire April 22.

Yamana’s financial adviser is Canaccord Genuity Corp., and Norton Rose Fulbright Canada LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are its legal advisers. National Bank Financial Markets was hired to provide a fairness opinion.

Agnico Eagle is being advised by TD Securities Inc. and Bank of America Merrill Lynch. Davies Ward Phillips & Vineberg LLP is its legal adviser.

Osisko’s financial advisers are BMO Capital Markets and Maxit Capital LP. Bennett Jones LLP and Stikeman Elliott LLP are its legal advisers.

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
Companies
Agnico Eagle Mines Ltd. and Yamana Gold Inc. agreed to jointly acquire Osisko Mining Corp. for C$3.9 billion ($3.55 billion), the latest twist in a battle for control of a Quebec mine that now involves three of Canada's largest gold producers.
Osisko, gold, Quebec, mine
476
2014-00-16
Wednesday, 16 Apr 2014 11:00 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved