January 30, 2014 / 4:09 PM / 4 years ago

UPDATE 1-Goldcorp secures Canadian antitrust approval on Osisko bid

By Euan Rocha
    TORONTO, Jan 30 (Reuters) - Goldcorp Inc 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.
    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.

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