The offer sent Osisko shares soaring more than 20 per cent or $1.07 to close at $6.24 on the Toronto Stock Exchange, well above the offer price as investors speculated that a rival bid might be made.
John Ing, president and chief executive of investment firm Maison Placements Canada, said Goldcorp will likely have to sweeten the offer if it wants to close the deal or face a rival.
"The reality is it's a miserly bid," Ing said, referring to the 15 per cent premium to Osisko's closing share price before the offer by Goldcorp.
Goldcorp chief executive Chuck Jeannes said Canadian Malartic would rank among Goldcorp's best mines if the deal were successful.
"Our strategy has never been about size, it's been about getting better and delivering disciplined and sustainable growth," Jeannes told a conference call with financial analysts.
He said Goldcorp's own Eleonore project in northern Quebec is due to begin production later this year and the acquisition of Osisko would provide an opportunity for some cost savings.
However, Jeannes was cagey about whether Goldcorp would be willing to raise its offer if needed to make the takeover happen.
"We've shown a history of being disciplined in these sorts of things and we have a view of the value proposition and we're going to stick to it. That's all I can tell you at this point," he said.
Gold stocks were beaten down last year as the price of bullion fell from its record highs and Osisko was no exception.
The stock has traded at a fraction of its highs of more than $15 reached in 2010. Osisko shares ended last week at $5.17 per share.
Vancouver-based Goldcorp is offering a combination of stock and cash that it values at $5.95 per share — about 15 per cent above Friday's closing price.
Under the offer, Osisko shareholders will be entitled to receive 0.146 of a Goldcorp common share plus C$2.26 in cash per share. The offer is being made directly to shareholders.
Osisko issued a brief statement after markets closed saying it was aware of the Goldcorp bid but that "no formal offer has yet been commenced."
"The board of directors of Osisko will consider this announcement as well as any formal offer actually made," it said. "Until the corporation completes its review, it will not comment further or speculate as to any future course of action it might take."
Goldcorp and Osisko are not strangers to each other.
The companies have had ongoing talks over the past few years, but those discussions stopped late last year.
Goldcorp sold its 10.1 per cent stake in Osisko in 2011 for $13.75 per share for a total of about $530 million.
Jeannes said the decision to sell the stake was based on valuation.
"Based on the way the market was acting, we saw value in selling them," he said Monday.
"From our perspective it has always been just about adding value and these prices and this point in the development of the company and the asset, we see a value proposition for not only our shareholders but Osisko's as well."
The acquisition of a company with assets in Canada follows a trouble filled year for miners with operations scattered around the globe.
Goldcorp took a hit last year from a writedown at its Penasquito mine in Mexico following a ruling by an agrarian court regarding a land rights dispute that nullified a lease on 600 hectares of land at the project.
The company also suspended exploration and deferred certain development plans at its Cerro Negro project in Argentina amid permitting delays, an unsustainable foreign exchange rate and uncertainty with respect to provincial taxation demands.
In addition to Canadian Malarctic in Quebec's Abitibi gold belt, Osisko owns the Hammond Reef gold project near Thunder Bay, Ont., and land holdings near Kirkland Lake, Ont.
Goldcorp shares closed down 25 cents at $25.04.Suggest a correction