Goldcorp chairman prefers to quit Osisko deal than overpay

Tue Mar 25, 2014 5:23pm EDT
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By Euan Rocha, Allison Martell and Nicole Mordant

TORONTO/VANCOUVER (Reuters) - Goldcorp Inc (G.TO: Quote) would rather walk away from its hostile bid for Osisko Mining Corp (OSK.TO: Quote) than pay too much for its fellow Canadian gold miner, Goldcorp Chairman Ian Telfer said on Tuesday, although he did not rule out raising the bid.

Goldcorp, the world's second biggest gold producer by market value, has several other growth opportunities, including the opening of two mines this year, and is doing "extremely well," Telfer said.

"It is much worse for us to overpay for an asset than it is to let it go," Telfer said in an interview.

"We are very focused on being disciplined and bringing down the crossbar. Somebody has to do it after all the high prices that were paid in the past," he said.

Vancouver-based Goldcorp in January launched a C$2.8 billion ($2.5 billion) cash and stock bid for Osisko to gain control of its Malartic gold mine in the province of Quebec. It is the gold-mining industry's biggest takeover bid for months after deals dried up following the writedown by Goldcorp's peers on billions of dollars of assets bought at sky-high prices as the bullion price ran up.

Osisko rejected Goldcorp's bid as too low, and has been building a case that its shareholders stand to benefit the most if it remains a standalone company.

Osisko's Chief Executive Officer Sean Roosen has said that he is confident that Goldcorp's current bid will fail to win over the majority of Osisko's shareholders.

Telfer disagreed although he pointed out that most of Goldcorp's major shareholders are also shareholders of Osisko, meaning investors end up wearing "two hats."   Continued...

Ian Telfer, chairman of Goldcorp, speaks to an interviewer during a Canada-Asia dialogue conference in Vancouver, British Columbia September 6, 2012. REUTERS/Ben Nelms