Do­min­ion Di­a­mond agrees to US$1.2 bil­lion agree­ment

The Hamilton Spectator - - BUSINESS - IAN BICKIS

The Wash­ing­ton Com­pa­nies has won over the board of Do­min­ion Di­a­mond Corp., one of the world’s largest di­a­mond pro­duc­ers, with a sweet­ened US$1.2bil­lion bid.

The pri­vately held Mon­tana firm is of­fer­ing US$14.25 in cash per share for all stock in Do­min­ion Di­a­mond, up from its US$13.50 per share of­fer that Do­min­ion re­jected in March.

“We’re go­ing to be in Canada for a very long time and this was a nice ad­di­tion to our port­fo­lio,” Lawrence Simkins, pres­i­dent of Wash­ing­ton Cos., said in a phone in­ter­view.

Do­min­ion’s board unan­i­mously sup­ported the bid, with board chair Jim Gowans say­ing it’s the best op­tion avail­able to share­hold­ers, em­ploy­ees and com­mu­nity mem­bers.

“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,” Gowans said in a state­ment.

If the deal is ap­proved, it will give Wash­ing­ton Cos. a con­trol­ling in­ter­est in the Ekati mine and a 40 per cent stake in the Di­avik di­a­mond mine run by Rio Tinto, both in the North­west Ter­ri­to­ries.

Wash­ing­ton Cos. said it’s com­mit­ted to mov­ing ahead with plans to ex­tend the life of the Ekati di­a­mond mine, in­vest in ex­plo­ration and hon­our ex­ist­ing com­mit­ments to Indige­nous com­mu­ni­ties.

The com­pany said it plans to op­er­ate Do­min­ion Di­a­mond as a stand­alone busi­ness with a new CEO based in Canada, but wouldn’t com­mit to keep­ing the head of­fice in Calgary.

RBC Cap­i­tal Mar­kets an­a­lyst Richard Hatch said in a note that Wash­ing­ton Cos., which is pay­ing a 44 per cent pre­mium to where Do­min­ion was trad­ing be­fore the March bid, is the log­i­cal bid­der and ex­pects the deal to go through.

The deal, which re­quires share­holder and other ap­provals, grants Do­min­ion the right to con­sider un­so­licited of­fers and Wash­ing­ton Cos. the right to match any su­pe­rior bid within five busi­ness days.

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