Goldcorp Inc. is abandoning its hostile attempt to buy Osisko Mining Corp., refusing to top a competing $3.9-billion bid for the Montreal-based company.
Osisko last week reached a deal to be taken over and split up by Yamana Gold Inc. and Agnico Eagle Gold Inc. The friendly agreement was worth about $7.86, based on share values at the time, compared with Goldcorp's $7.38 offer.
Vancouver-based Goldcorp, which had made two earlier attempts to buy Osisko, said in a statement on Monday that it would let its current bid expire on Tuesday.
"We stated from the beginning of this process that we would remain disciplined with respect to our offer to acquire Osisko, and our decision not to amend the offer is consistent with that commitment," Chuck Jeannes, Goldcorp chief executive officer, said in a statement.
Goldcorp had also launched a proxy battle to replace the board at Osisko, whose prized asset is its Canadian Malartic gold mine in Quebec.
Osisko shares fell to about $7.60 on the Toronto Stock Exchange on Monday, less than the Yamana-Agnico offer. The share price has soared by 65 per cent since mid-January when Goldcorp made its offer.
The battle that drove up Osisko's share price comes as gold prices have fallen by 23 per cent since the beginning of 2013. Miners have struggled to raise money as investors have stayed away from sectors seen as risky. But Quebec is a stable business environment, and producing mines there are highly coveted.
The joint takeover by Yamana and Agnico would see Osisko shareholders get shares in both miners, as well as $2.09 in cash and stock in a smaller version of Osisko focused on exploration. Shareholders are expected to vote on the deal in May.
Yamana and Agnico would split the Northwestern Quebec Canadian Malartic mine, which holds more than nine million ounces of gold and began production 2011.