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In the diamond market, Calgary-based Dominion Diamond Corp. is a big player. They have controlling interests in the Ekati diamond mine and the Diavik diamond mine, both located in the Northwest Territories.
Dominion Diamond is one of the world’s largest diamond producers, and they’ve just accepted a takeover bid totaling $1.2 billion from The Washington Companies.
The Washington Companies, also known as WashCorps, is a group of individual and privately held companies. The Montana-based company deals with industries which include mining, aviation, rail, and marine transportation. It has stated that it plans to run Dominion Diamond as a singular entity with its headquarters and new operations office based out of Canada.
WashCorps has offered Dominion Diamond $14.25 USD per share for all shares and claims they will match any other offer that is laid on the table.
Dominion’s board of directors chairperson Jim Gowans said the board unanimously agreed this offer was the best option for Dominion shareholders. Gowans gave his recommendation to shareholders to vote in favour of the Washington takeover. He spoke on behalf of Dominion, saying that this transaction would be a positive move for shareholders as well as employees and members of the community. His public condoning of the WashCorps deal is important as the completion of the deal will require shareholder approval.
The closing price for Dominion Diamond was $13.48 on Friday afternoon, just slightly lower than Washington’s offer. Dominion has that pending the completion of this deal, it will temporarily suspend stock buybacks and dividend payments. The deal is expected to complete in the fourth quarter.
Prior to this offer from Washington, Dominion Diamond rejected an offer of $13.50 USD per share, and began seeking a better deal. The WashCorps deal allows for Dominion to continue accepting other offers, and for WashCorps to match a higher bid within 5 business days.