CORRECTED-UPDATE 3-Goldcorp offers C$2.6 billion to acquire Osisko Mining

Mon Jan 13, 2014 11:33am EST
 
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(In penultimate paragraph, corrects market cap rankings)

* C$5.95/shr cash-and-stock offer represents 15 pct premium

* Goldcorp says bid to remain open until Feb. 19

* Osisko shares up 19 percent; Goldcorp shares slip

By Euan Rocha

TORONTO, Jan 13 (Reuters) - Goldcorp Inc launched an unsolicited cash-and-stock bid to acquire smaller rival Osisko Mining Corp for C$2.6 billion ($2.4 billion) on Monday, in a move to gain control of Osisko's Malartic gold mine in Quebec.

The takeover bid is the Canadian gold sector's first major attempt at a merger and acquisition deal in nearly a year. Miners stung by a 25 percent drop in the price of gold over the last 12 months have focused on cutting costs and slowing down work on growth projects.

The acquisition of the large low-grade Malartic deposit will boost Goldcorp's proven and probable reserves by some 10 million ounces, but it also carries its own set of perils.

"Given the low grade of the reserves, the Osisko assets will be relatively susceptible to any further weakness in the gold price, though the Canadian dollar will help protect the domestic mining industry," wrote JPMorgan analyst John Bridges in a note to clients.   Continued...