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Dominion Seals $1.2B Takeover by Washington

Jul 17, 2017 9:48 AM   By Rapaport News
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The Washington Companies will acquire Dominion Diamond Corporation for $1.2 billion, the firms said in a joint statement Monday.

Washington, a mining group founded by entrepreneur Dennis Washington, has agreed to buy all shares in Dominion for $14.25 each in cash — a 44% premium to the Canadian diamond miner’s stock price of $9.92 on March 17. Dominion’s share price rose 4% in early trading Monday, and has jumped approximately 40% since news of Washington’s interest first became public knowledge four months ago.

In March, Dominion turned down an informal offer from the company, describing it as “opportunistic.” Around the same time, Reuters reported Dominion had held merger talks with Stornoway Diamond Corporation, another Canada-focused miner. Dominion set up a committee to assess sale opportunities toward the end of March, with the Canada Pension Plan Investment Board later emerging as another potential suitor.

Washington’s new offer “is the result of a robust strategic review process,” Dominion chairman Jim Gowans said in the Monday statement. “The board unanimously agrees that this offer represents the best option available to Dominion shareholders, and recommends that shareholders vote in favor of this transaction.”

The Montana-based Washington plans to keep Dominion as a standalone business, as it does with other companies it owns, it said. It will appoint a new, Canada-based CEO for the miner, replacing Brendan Bell, who previously said he would stand down from the role by June 30.

Washington said it would keep Dominion’s headquarters in Canada and maintain a “significantly Canadian management team,” as well as continuing to promote Dominion’s CanadaMark brand.

Dominion owns 100% of the Ekati mine and has a 40% stake in the Diavik mine in a joint venture with Rio Tinto. Both assets are in Canada’s Northwest Territories.

“We are excited to work with their team to extend the mine life of the Ekati mine and continue partnering with Rio Tinto in the operation of the Diavik mine, while maintaining long-term employment for Dominion employees,” said Washington president Lawrence Simkins.
Tags: Brendan Bell, Canada, CanadaMark, Dennis Washington, Diavik mine, Dominion, Dominion Diamond Corporation, Ekati mine, Jim Gowans, Lawrence Simkins, Rapaport News, Rio Tinto, Washington Companies
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