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Dominion Investors Call for Share Buyback After Stock Plunges 33% Last Year
Jan 4, 2016 9:34 AM
By Rapaport News
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RAPAPORT... Two Dominion Diamond Corp. shareholders have
urged the Canadian-listed miner to use cash for a share buyback, Reuters
reported, citing the unidentified investors who asked not to be named.
The shareholders, who
own nearly 3 percent of Dominion, could use some of its nearly $300 million in
net cash to buy back stock, the report said December 30. The cash pile is equal
to about 35 percent of the company’s market value.
“The
allocation of capital has been non-existent,” Reuters cited one of the
shareholders as saying and pointed Dominion was not
immediately available to comment on the shareholder concerns.
The news comes after Dominion’s
management was criticized by a group of investors who own 5.4 percent of total
stock, claiming the share price had suffered from
“misguided policies and missed opportunities.” The group, led by K2 & Associates
Investment Management, plans to ask for several seats on Dominion's board and
will attempt to propose its own roster of directors if it cannot force out
chairman Robert Gannicott and chief executive officer Brendan Bell, the news
report continued.
The group is scheduled to meet members
of Dominion’s board January 5. One of the shareholders calling for the buyback
is part of that group while the other is not, Reuters said.
Dominion’s share price fell 33 percent in 2015 to December 29.
In related
developments, the miner hired Rothschild & Co. to explore a potential sale,
Bloomberg reported December 22, and two company directors resigned from the
board “for personal reasons,” Dominion announced December 24.
In 2013, Dominion shareholder Caerus Global Investors called upon the
company to buy back shares instead of keeping cash to invest in the Ekati mine in
Canada.
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Tags:
Canada, Dominion Diamond Corp., mining, Rapaport News, stocks
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