National Post (National Edition)
Dominion Diamond attracts $1.1B offer
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is looking for alternative bidders after receiving an unsolicited proposal from billionaire Dennis Washington to acquire the company last month for about US$1.1 billion.
The Toronto-based miner formed a special committee and is working with TD Securities Inc. to explore, review and evaluate a range of options for maximizing shareholder value, including a sale, according to a statement Monday.
Dominion Diamond rose almost four per cent in morning trading in New York. It finished the day at US$17.32 up 1.9 per cent.
“While the board of directors remains confident in the company’s long-term strategic plan and the opportunity it provides to enhance value for all shareholders, we are open to exploring all strategic alternatives,” James Gowans, Dominion Diamond chairman, said in the statement.
The new strategic review comes a little more than a year after Dominion launched a similar process, which didn’t result in a sale. After the news of Washington Cos. proposal was made public last week, Dominion received several expressions of interest if it were to launch a formal sales process, according to people familiar with the matter.
Tanya Jakusconek, an analyst with Bank of Nova Scotia, said in a note to clients last week that Rio Tinto Plc, De Beers and Russia’s Alrosa Group may have an interest in looking at the company.
Rio has said it wanted to buy more diamond assets. The miner already owns 60 per cent of Dominion’s Diavik mine.
In 2015, it put together a proposal to buy the remaining 40 per cent stake held by Dominion along with a smaller development project, people familiar with the matter said late last year.
The plan was rejected internally before reaching the board level, the people said.