U.S. firm WashCorps to buy Canadian diamond miner Dominion for $1.2B
by David Paddon, The Canadian Press
Dominion Diamond has interests in two diamond mines in the Northwest Territories northeast of Yellowknife
TORONTO—Dominion Diamond Corp., one of the world’s largest diamond producers, is endorsing a US$1.2-billion friendly cash takeover bid from the Washington Companies, the Calgary-based miner said July 17.
Under the tentative agreement, the privately held Montana-based company is offering US$14.25 per share for all shares of Dominion Diamond and it will have the opportunity to match any rival bid that comes forward.
“This offer is the result of a robust strategic review process and the board unanimously agrees that this offer represents the best option available to Dominion shareholders, and recommends that shareholders vote in favour of this transaction,” Jim Gowans, who chairs Dominion Diamond’s board of directors, said in a statement.
“Dominion also believes this transaction is an excellent outcome for the company’s stakeholders, including employees, community members and the Northwest Territories. The transaction allows the operation to take the next steps in mine development and ensures mining and its associated benefits continue in the North for decades to come.”
Dominion Diamond had rejected a previous offer of US$13.50 per share and began a process to find alternative bids. Washington’s revised offer is slightly above the Friday closing price of US$13.48 in New York.
Dominion Diamond has interests in two diamond mines in the Northwest Territories northeast of Yellowknife—it operates the Ekati diamond mine, in which it has a controlling interest, and owns 40 per cent of the Diavik diamond mine.
Washington Co., sometimes called WashCorps, said it plans to operate Dominion Diamond as a stand-alone business with a new CEO based in Canada.
It said it will also keep Dominion Diamond’s headquarters in Canada, with a Canadian management team, and honour its existing commitments to Indigenous communities to ensure their interests are protected.
The deal, which requires shareholder and other approvals, grants Dominion Diamond the right to consider unsolicited offers and WashCorps the right to match any superior bid within five business days.
Dominion said it will suspend paying dividends and its stock buybacks program pending completion of the deal, which is expected to close in the fourth quarter.