Osisko Mining Corp. (TSE:OSK), a Canadian gold miner, jumped to the highest in a month after saying it has reached a friendly deal to be acquired by Yamana Gold Inc. (TSE:YRI) and Agnico Eagle Mines Ltd. (TSE:AEM) in a deal valued at C$3.9 billion.
Osisko advanced to C$7.95, the highest intraday price since March 14, and was trading at C$7.90, up 6.3 percent, at 1:40 p.m. in Toronto.
Osisko said Yamana and Agnico’s cash-and-stock offer, valued at C$8.15 per share, represents a premium of 11 percent to the current hostile bid from Goldcorp Inc. (TSE:G), the Montreal, Quebec–based company said in a statement today.
Yamana and Agnico Eagle, Canada’s fourth and fifth-largest gold producers by sales respectively, are grappling with Vancouver, British Colombia-based Goldcorp, the second-largest Canadian gold miner by revenue, to win control of Osisko's flagship asset: the Canadian Malartic gold mine in the province of Quebec. The mine is attractive as it is a huge, low-cost asset located in a stable political jurisdiction.
Under the revised Yamana-Agnico agreement, Osisko shareholders would receive cash, shares of Yamana and Agnico Eagle, and shares of a new Osisko entity.
The new Osisko spinout would get royalties, cash and some exploration assets in Mexico.
"Ten years ago we embarked on a journey to find a gold deposit. It was a plan that grew into the successful and highly profitable world class mine that is now Canadian Malartic. From the beginning, we have never strayed from our objective of building shareholder value," Chief Executive Officer Sean Roosen said in the statement.
"With the announcement today of the combined bid by Yamana and Agnico Eagle, I believe we have delivered shareholders the superior value option to the hostile attempt to acquire our Company," Roosen added.
Today’s deal replaces a transaction announced on 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. That deal included funding to Osisko from two Canadian pension funds, which wasn’t included in the deal announced today.
Osisko’s financial advisers are BMO Capital Markets. Yamana’s financial adviser is Canaccord Genuity Corp. 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.