Montreal - Canada's Osisko Mining Corporation on Monday rejected a C$2.6 billion ($2.4 billion) hostile takeover bid by mining giant Goldcorp, calling it insufficient.
“The Special Committee and Board of Directors have determined that the offer is financially inadequate and not in the best interests of Osisko,” the Quebec-based company said in a statement.
In announcing the bid last week, Vancouver-based Goldcorp proposed one of the biggest mining sector deals in more than a year.
It came as gold companies are struggling to cut costs to stay afloat after bullion prices fell more than 35 percent from record highs.
Osisko said Goldcorp's offer “significantly undervalues” its “world-class” Malartic gold mine in western Quebec, as well as the rest of its portfolio in North America.
In its January 13 statement announcing its bid, Goldcorp said the offer of 0.146 Goldcorp shares plus C$2.26 in cash for each Osisko common share (a total value of C$5.95) was a 15 percent premium over Osisko's closing price on January 10.
But Osisko on Monday called the 15 percent premium “meagre”.
Goldcorp is Canada's second largest gold company after Barrick, with a dozen mines operating in the Americas and several more in development.
Osisko's main asset is the Malartic gold mine, which started production in 2011.
Over its 16-year lifespan the mine is expected to turn out 500 000 to 600 000 ounces of gold per year, according to Osisko. - Sapa-AFP