Dominion Diamond Corp's Ekati mine, Northwest Territires
Photo by: Dominion Diamonds
VANCOUVER (miningweekly.com) – Canada’s largest diamond producer Dominion Diamond Corp has launched a formal process to evaluate the potential sale of the company or other strategic transactions.
This follows after Montana-based Washington Companies, a group of companies founded by industrialist and entrepreneur Dennis Washington, last month made a $1.1-billion unsolicited bid to buy Dominion.
Dominion said on March 19 that it had considered and snubbed the $13.50-a-share takeover proposal from Washington Companies as the terms to advance talks were unacceptable and the "highly opportunistic" bid undervalued the company.
Dominion’s board has now formed a special committee to explore, review and evaluate a range of potential strategic alternatives. The committee members include Trudy Curran, Jim Gowans, David Smith and Josef Vejvoda.
“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 that are in the best interests of the company and its stakeholders,” chairperson Gowans stated.
The board has not set a timetable for this process nor has it made any decisions related to strategic alternatives at this time, and there can be no assurance that the exploration of strategic alternatives will result in any transaction or change in strategy.
According to news agency Reuters, Stornoway Diamond Corp has also held merger talks with Dominion in recent months
TD Securities is acting as financial adviser to Dominion, Stikeman Elliott is acting as legal adviser to the company and Kingsdale Advisors is acting as strategic adviser to the company. Paul, Weiss, Rifkind, Wharton & Garrison is acting as legal adviser to the special committee and the board.
Dominion’s TSX-listed stock ticked up nearly 5% to C$17.82 apiece on Monday as investors vie to get in on the action, which has now set the stage for major players such as Rio Tinto and Anglo American, through its De Beers business unit, to make a move on the company. Rio is already a Dominion partner, owning 60% of the Diavik mine, in the Northwest Territories, where Dominion also owns and operates the Ekati mine.