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Goldcorp is considering sweetening its proposal by spinning off Osisko’s exploration assets into a separate company.daniel rompre

Goldcorp Inc. chairman Ian Telfer dared Osisko Mining Corp. to find an alternative to his company's $3-billion hostile offer, saying the smaller miner has had more than enough time.

"If they had something pending, we would have heard of it by now. I don't expect anyone to come in," Mr. Telfer said in an interview.

It has been more than two months since Vancouver-based Goldcorp announced the unsolicited bid, and time is running out for Osisko. By April 1, Goldcorp will be allowed to examine Osisko's confidential data on its Canadian Malartic gold mine in Quebec. By mid-April, Goldcorp can take up any shares that are tendered to its bid.

But Goldcorp must improve the offer, analysts say.

One way Goldcorp is considering sweetening its proposal would be to keep Canadian Malartic and spin off Montreal-based Osisko's exploration assets into a separate company, sources have said. That would give Osisko shareholders a stake in Goldcorp as well as a new company that holds assets such as gold properties in Ontario and Mexico.

That is favoured by some of the arbitrageurs, or short-term investors who acquired Osisko's shares when Goldcorp made the bid and are now expecting a higher offer to emerge.

But Osisko chief executive officer Sean Roosen thinks the spinoff idea is laughable. "I am driving a Ferrari now. Why would I want to drive a Buick?" he has told shareholders.

Goldcorp has tried to buy Osisko and its prized Canadian Malartic for more than five years. The mine holds more than nine million ounces of bullion reserves.

Mr.Telfer said his company's "likely path forward" is to extend the bid until April 15 if it likes what it sees after conducting due diligence. "Right now we think our offer reflects the value we see out there."

Goldcorp's cash and stock proposal is valued at $6.42 a share, based on current prices. That is lower than Osisko's Tuesday trading price of $7.41.

What is tricky for Goldcorp is that many of Osisko's shareholders also own Goldcorp stock. "They are very conflicted. They want the deal to go through. But because they own Osisko shares they want a higher price," Mr. Telfer said. "At the same time, [the market] has been chastising the gold industry for the past five years – 'Don't overpay for assets.'"

Goldcorp's stock dropped when the bid was announced in mid-January. Its shares have since climbed 13 per cent to $28.50, suggesting that Goldcorp investors like the miner's actions. It is unknown whether the market would support a higher offer or drive down Goldcorp's stock.

What works in Goldcorp's favour is the lack of competition. Although Osisko says it is entertaining options, many larger mining companies are not in a position to make an acquisition. Goldcorp rivals Barrick Gold Corp. and Kinross Gold Corp. have taken hefty writedowns on assets bought during the commodity boom and are working on building investor confidence.

Smaller producers, such as Agnico Eagle Mines Ltd., which at one point looked at Osisko, would have a hard time competing with much-larger Goldcorp, analysts have said.

Mr. Telfer, who has been involved in other hostile bids, said Goldcorp would not suffer if it had to drop Osisko. "We love this asset … but if we can't do it at a price where we think it makes sense, then we will walk away."

Mr. Roosen said he once asked Mr. Telfer how he became so successful. "He told me, 'Sean, you have to get a world-class asset – whether you beg, borrow or steal – but you have to get a world-class asset,'" Mr. Roosen said in an e-mailed statement. "It looks like not much has changed at Goldcorp. They're still working off the same business plan. But at Osisko, we've found our world-class asset and our shareholders are not going to have it taken away at a steal."