Washington Companies in Talks to Buy Dominion

Jul 16, 2017 7:09 AM By Rapaport News

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RAPAPORT... Dominion Diamond Corp, the third-largest diamond producer by value, is in advanced talks with the Washington Companies on a cash-takeover bid, news agencies reported.

Negotiations are focused on the two sides settling on a price for the Canadian diamond miner, Reuters reported Friday, though the sources quoted declined to comment publicly. A deal could be announced within weeks, reports said.

Dominion is hoping that the Montana-based consortium will increase its offer, according to Bloomberg.

The Washington Companies, which declined to comment, is a group of privately held North American mining, industrial and transportation businesses founded by industrialist Dennis Washington.

Dominion has said there is no guarantee a deal will take place.

“The company has not 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,” Dominion said in response to the reports.

“As previously disclosed, interested parties, including Washington Corporations, have executed confidentiality agreements with the company,” the company added.

Trading in Dominion shares was halted on the Toronto Stock Exchange minutes after the stock rose 4.74 percent, following the Reuters report on the talks. US-listed shares, which peaked at $13.60 after the report, closed at $13.48 in New York, up 5.6%.

The Washington Companies’ initial unsolicited cash proposal of $13.50 per share had been the catalyst for Dominion to formally put itself up for sale in March. It was unclear how much of an improvement the Washington Companies intended to offer on that price.

At $13.50 per share, the acquisition would be worth nearly $1.09 billion (CAD 1.38 billion).

Dominion, which owns a majority stake in the Ekati mine and a minority share of the Diavik mine in Canada’s Northwest Territories, rejected the Washington Companies’ initial advance, saying it undervalued the company.

Tags: Canada, diamond, diamonds, Dominion Diamond, ekati, Jewelry, Rapaport News, Washington Companies