Osisko To Sell 50% Mining Assets To Yamana Gold To Thwart Goldcorp Bid

(RTTNews) - Canadian gold miner Osisko Mining Corp. (OSK.TO), Wednesday said it agreed to sell 50 percent stake in its mining and exploration assets to bigger peer Yamana Gold Inc. (AUY, YRI.TO) for C$929.6 million in stock and cash deal. The deal is to thwart the hostile takeover attempt by Goldcorp Inc. (G.TO, GG). Shares of Osisko is currently up about 9 percent on the news.

Yamana will pay C$441.5 million in cash and 95.7 million in shares bringing the total value to C$929.6 million. The deal values Osisko at C$7.60 a share, representing 10 percent premium over yesterday's closing price and 22 percent premium over Goldcorp's hostile bid currently valued at C$6.21 a share.

Under the deal, each outstanding share of Osisko will be exchanged for C$2.194 in cash, 0.2119 of a Yamana share and a new share of Osisko.

Osisko said Yamana will become an equal partner in all of its mining and exploration assets. Osisko will continue to operate the Canadian Malartic Mine and all other projects under the guidance of a joint operating committee, and will also maintain its head office in Montreal.

In mid-January, Goldcorp made an hostile offer to buy Osisko in a cash and stock deal for about C$2.6 billion, or $2.38 billion. Goldcorp's cash-and-stock bid for Osisko currently has a value of C$6.21 a share.

On January 20, Osisko rejected the hostile take-over bid from Goldcorp, citing it to be financially inadequate and not in the best interests of Osisko.

OSK.TO is currently trading at $25.09, up $0.56 or 2.28%.

GG is currently trading at $25.11, up $0.58 or 2.36%, on the NYSE, while on the Toronto Stock Exchange its is trading at $27.70, up $0.62 or 2.29%.

YRI.TO is currently trading at $9.60, down $0.11 or 1.13%.