Dominion Diamond to go under the hammer

Diamond Industry
[Image Courtesy - www.ddcorp.com]

The third largest diamond producer by value, Dominion Diamond is looking for alternative bidders to exit. The company put itself for sale after a USA billionaire Dennis Washington approached them with an unsolicited USD 1.1 billion bid.

Nearly a year ago, Dominion Diamond had launched a similar process, but it did not yield any results. A panel of four company directors are part of a committee to explore, review and evaluate alternatives which include the sale of the company too. The committee has Trudy Curran, David Smith, Joseph Vejvoda and Chairman James Gowans.

“While the board of directors remain 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,” James Gowans, Dominion Diamond chairman, said in a statement.

Analysts say Rio Tinto, De Beers and Alrosa may consider bidding. Apart from these, Canada Pension Plan Investment Plan, Blackstone Group and Carlyle Group had expressed interest in previous process. There are chances that these may participate again. The sale process may also attract other players like, Apollo Global Management.

Washington Company had offered a USD 13.50 a share takeover proposal. Dominion found the proposal unacceptable and the bid undervalued the company.

After Dominion refused the proposal, Lawrence Simkins, President, Washington Cos. said in a statement, “We are disappointed that Dominion’s board has thus far prevented Washington from moving ahead with its proposal under which shareholders would receive a substantial premium and immediate liquidity, but we remain fully committed to completing this transaction.”

Dominion’s stock was up 3.4% at USD 13.15 at the New York Stock Exchange after the company put itself for sale.

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