Dominion Diamond in takeover discussions: sources
TORONTO Calgary-based Dominion Diamond Corp, the world’s third-largest diamond producer by market value, is in advanced and friendly talks with the Washington Companies on a sweetened cash takeover bid, sources told Reuters this week.
Negotiations are focused on the two sides settling on a price, said the sources, who declined to speak publicly on the matter. A deal could be announced within weeks, they said.
Trade in Dominion shares on the Toronto Stock Exchange was halted pending news. The stock had gained as much as 4.74 per cent following Reuters’ report on the talks.
The U.S.-listed shares jumped 5.64 per cent to close at US$13.48 Friday in New York.
It was unclear how much Washington Companies had increased its initial unsolicited cash proposal, of wUS$13.50 a share, which was the catalyst for Dominion to formally put itself up for sale in March.
At US$13.50 a share, the acquisition would be worth nearly US$1.09 billion, or C$1.38 billion.
Dominion, which owns a majority stake in the Ekati mine and a minority share of the nearby Diavik mine in the Northwest Territories, had rejected Washington’s initial advance, saying it undervalued the company and that the terms of proposed talks were unacceptable.
Washington Companies is a group of privately held North American mining, industrial and transportation businesses founded by industrialist and entrepreneur Dennis Washington.
Washington Companies declined to comment, while Dominion was not available for comment.
Washington and other interested parties signed confidentiality agreements to review company data, Dominion said on May 1.
The sales process, a rarity in the tightly controlled global diamond industry, attracted the Canada Pension Plan Investment Board, sources told Reuters.