Osisko drops lawsuit in takeover battle, Goldcorp offer extended to April 15

MONTREAL – Osisko Mining Corp. (TSX:OSK) said Monday it has settled a lawsuit it filed against Goldcorp Inc. (TSX:G) as part of the Montreal-based company’s fight against a hostile takeover by the senior gold miner.

Under the settlement, which deals with access to information, the offer from Vancouver-based Goldcorp has been extended to April 15, from March 10, while Osisko continues its search for an alternative bid.

Osisko has also agreed to provide Goldcorp with access to due diligence materials starting April 1, or earlier if Osisko signs a deal with another bidder.

Under terms of the Goldcorp bid, Osisko shareholders would receive 0.146 of a Goldcorp share and $2.26 in cash per Osisko share.

The price of gold and share prices for many gold producers have risen in recent weeks but Osisko shares have traded well above the implied value of the Goldcorp offer since the bid was first announced.

Osisko’s shares closed Friday at $7.05, giving it a market value of nearly $3.2 billion, but rose to a new high on Monday. In early trading, Osisko rose above $7.45 for the first time since early 2013.

Goldcorp shares opened at $30.66, making the implied value of its offer about $6.74 per share — up from the original valuation of $5.95 based on its Jan. 10 stock price, which was $25.29.

Osisko had accused Goldcorp of breaking a confidentiality agreement and failing to honour a standstill agreement in a legal challenge that was to be heard this week, prior to the settlement announced Monday.

Osisko’s main asset is the Canadian Malartic gold mine in northern Quebec where it has been ramping up operations since its first commercial production in May 2011.