TORONTO (Reuters) - Goldcorp Inc G.TO said on Thursday that Canada’s antitrust watchdog has indicated it does not intend to challenge the gold miner’s move to acquire its smaller rival Osisko Mining Corp OSK.TO.
Vancouver-based Goldcorp said it has obtained an advance ruling certificate from the Competition Bureau, removing one of the hurdles it faces in its C$2.6 billion ($2.3 billion) hostile bid for Osisko.
“We have met and discussed our offer with a significant number of Osisko’s shareholders and have received strong support for this business combination,” Goldcorp Chief Executive Chuck Jeannes said in a statement.
Osisko has slammed the offer as “opportunistic” and advised its shareholders to reject it stating it does not offer an adequate premium.
Goldcorp said on Thursday it will not overpay for Osisko, which owns the Malartic gold mine in the prolific Abitibi Gold Belt in Quebec.
“We have seen fundamental changes take place in the gold market and the gold mining industry in recent years. Successful gold companies today must be financially disciplined, and make investments that provide strong rates of return to investors as opposed to overpaying for assets,” said Jeannes.
The price of gold has fallen more than 35 percent from its peak of over $1,900 an ounce in late 2011. Some analysts have cautioned that a winning deal could increase risk for Goldcorp, if the price of gold falls further, given current operating costs at the Malartic mine.
Montreal-based Osisko said on Wednesday it has sued Goldcorp in an attempt to foil the miner’s hostile bid, alleging that its suitor misused confidential information.
Goldcorp, on Thursday, denied the allegations made by Osisko and said it will take all necessary steps to vigorously defend its position.
Shares in both Goldcorp and Osisko fell sharply on Thursday, as the price of gold fell more than 2 percent after a $10 billion cut to the Federal Reserve’s monetary stimulus programme boosted the U.S. dollar and sent gold sliding.
Goldcorp shares fell 3.9 percent in early trading on the Toronto Stock Exchange, while those of Osisko fell 4.8 percent.
Reporting by Euan Rocha; Editing by Sofina Mirza-Reid