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Washington Cos shines a bright offer on Dominion Diamonds
Posted on Monday, 20 March 2017 13:36
The Washington Companies has submitted a bid to acquire Canadian diamond mining company Dominion Diamonds for about USD 1.10 billion in cash.
Under the terms of the proposal, the buyer is offering USD 13.50 per share, representing a premium of 36.0 per cent to the target’s close of USD 9.92 on 17th March, and a 54.0 per cent increase from when discussions ended on 15th March.
The offer was submitted to Dominion Diamonds’ board on 21st February and after multiple negotiations were made over a three-week period.
However, the directors continue to refuse to grant Washington Cos access to due diligence, which the company stated could lead to an increased price.
The proposal is not conditional on financing but will require the acquiror to conduct confirmatory due diligence during a period of exclusivity and negotiating an acquisition agreement.
President Lawrence Simkins said: “We are disappointed that Dominion’s board has thus far prevented Washington from moving ahead with its proposal under which shareholders would receive a substantial premium and immediate liquidity, but we remain fully committed to completing this transaction.
“We believe our proposal is extremely compelling and clearly in the best interests of Dominion and all of its stakeholders, including shareholders, customers, employees, and communities.”
Simkins also added that if the transaction does go ahead it would provide the target’s investors with a significant cash premium, while also offering the company itself long-term investment to develop assets and create further opportunities.
Dominion Diamonds is a Canadian miner, billed as the country’s largest diamond producer, with interests in two major locations located around 200 km south of the Arctic Circle in the Northwest Territories.
The company operates the Ekati Diamond Mine, in which it owns a controlling interest, as well as its 40.0 per cent holding of the Diavik Diamond Mine.
Dominion Diamonds, which has a market capitalisation of USD 818.93 million, has sales locations in Canada, Belgium and India.
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