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Work at an Osisko Mining operation.

Daniel Rompre

The battle for Osisko Mining Corp.'s large gold mine in Quebec has turned nasty with shareholders blasting the miner, the hostile bidder Goldcorp Inc. and the company's white knight.

Vancouver-based Goldcorp, which has coveted Osisko's Canadian Malartic gold mine for years, raised its hostile bid to $3.6-billion to squash a friendly deal from Yamana Gold Inc.

The mine holds more than nine million ounces of bullion reserves and is in a safe jurisdiction, making it a prized asset for companies such as Goldcorp and Yamana.

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Investors pushed Osisko's shares above Goldcorp's latest cash and stock offer of $7.48 per share in hopes of a sweeter bid, and shareholders voiced displeasure with both deals.

"I don't know where these people are coming from. Why wouldn't they at least go to $8? If you are serious about this, you should get serious," said John Kinsey, a portfolio manager with Caldwell Securities, which holds shares of Goldcorp and Osisko.

Goldcorp's latest offer, unveiled on Thursday, is $1-billion higher than its original deal.

On a per-share basis, Goldcorp's bid is lower than the Yamana deal valued at $7.54 per share when using Osisko's valuations.

Some analysts have assigned a lower value to the Yamana-Osisko deal. And the sheer complexity of the Yamana-Osisko deal could end up working in Goldcorp's favour.

The Yamana proposal would split Osisko's flagship Canadian Malartic gold mine in half and create a smaller Osisko. It involves a capital injection from two Canadian pension funds and a deal to sell a portion of the mine's future gold production at a discount.

It also allows Osisko chief executive Sean Roosen and the rest of the company's management team to keep their jobs and continue operating their gold mine.

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"In our opinion, with so many moving parts to the Yamana deal, the greater simplicity and amount offered by Goldcorp is likely to be viewed as the favoured bid," Desjardins Securities analyst Michael Parkin said in a research note Thursday.

"We believe Yamana will need to increase its offer in order to be successful. However, in our opinion, the Yamana offer does provide shareholders with a more direct exposure to the high-quality Canadian Malartic mine and may be a reason for some shareholders to prefer the Yamana offer."

TIG Advisors LLC, which controls 4.5 per cent of the shares of Osisko, prefers the Goldcorp bid. TIG portfolio manager Drew Figdor said he did not appreciate Osisko's chief executive calling the Yamana bid superior to the latest Goldcorp offer.

Mr. Roosen "has already determined Yamana to be superior, even though that's not what we're valuing it at or the Street or any large shareholder we've spoken to," said Mr. Figdor, who is seeking a friendly resolution with Goldcorp. He said that the Yamana offer has "less certainty" of value than the Goldcorp offer.

Mr. Kinsey was equally miffed with the Yamana deal and called it a "desperate move." He wants Osisko to remain as a stand-alone company and will not tender to either bid.

Goldcorp and Yamana did not shut the door on sweeter offers.

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"This is a full and fair offer. But there is no reason to rule anything out," Goldcorp's chief executive Chuck Jeannes told reporters in Toronto.

Yamana said the Goldcorp bid validates its view that Osisko is "worth substantially more than what was reflected in the market."

"It also validates a view that we were modest and even conservative in our initial view of the value of Osisko," Yamana's chief executive Peter Marrone said in an e-mailed statement.

Vancouver-based Goldcorp also lowered the minimum tender condition to a simple majority from a two-thirds requirement, which is risky as the company could have to deal with a messy boardroom battle and be forced to extend its offer to gain complete control of the Quebec miner.

Yamana has until next Thursday to counter under the terms of the deal. Osisko will have to pay Yamana $70-million if Osisko ends up merging with Goldcorp or another rival.

When asked if Yamana and Osisko would try to top Goldcorp's latest offer, Mr. Roosen said, "I don't think either of us went into this to lose."

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As for reconciliation between Goldcorp and Osisko, their relationship has deteriorated to the point where Mr. Jeannes said, "We don't see any room for a friendly transaction at this point."

This is the fifth time Goldcorp has made an offer for Osisko. The first three bids were privately proposed about five years ago. They were all rejected as low-ball offers.

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