Washington Companies to acquire Dominion Diamond Corp.

Dominion Diamond
[Image Courtesy - ddcorp.ca]

The news about Dominion Diamond going under hammer was up only a few months back. While the deal fell through at that point of time, it seems Dominion finally has a buyer. Earlier in March, USA billionaire Dennis Washington offered USD 13.50 per share. Dominion Diamond at that point, found that the offer was unacceptable and undervalued the company. However, now with a revised offer, Dominion has agreed to the deal.

Transaction details

Washington Companies, owned by Dennis Washington, a group of privately held North American mining, industrial and transportation businesses have agreed to acquire Dominion’s all outstanding common shares. A subsidiary of Washington Companies has entered into an agreement with Dominion Diamond to acquire the latter’s share for USD 14.25, higher than its earlier offer of USD 13.50 per share. It also is a 44 percent premium to Dominion’s bid price of USD 9.92 on March 17. The total equity value thus becomes around USD 1.2 billion. The bid was unanimously supported by the board of Dominion Diamonds.

Jim Gowans, Chair of the Board of Dominion Diamond Corp. said, “The Washington offer delivers compelling and immediate value to Dominion shareholders at an attractive premium that recognizes the intrinsic value of Dominion and provides shareholders certainty through an all-cash offer. This offer is the result of a robust strategic review process and the Board unanimously agrees that this offer represents the best option available to Dominion shareholders, and recommends that shareholders vote in favour of this transaction.”

Future Plans

Washington plans to take up Dominion as a standalone business, as it does with its other operations. They are looking to appoint a CEO in Canada, while keeping it as the headquarters with a Canadian management team. They also look forward into deploying capital for the development of Jay and Fox Deep projects. Making investments in a reinvigorated greenfield exploration program is also on cards.

Environment has always been a matter of concern when it comes to mining. Washington has proposed to maintain a high level of environmental stewardship across all its operations at Dominion. They have also made it clear to provide employment security to skilled and high-paying jobs at Dominion. They want to recruit, train and employ indigenous people and to honour the commitments already made to indigenous communities for the protection of their interests.

Washington plans to assist social, recreational and community development programs by continuing with scholarship programs and heritage funds. They want to continue providing support to local suppliers and contractors along with indigenous businesses. They have also promised to maintain and promote Dominion’s CanadaMark trademark, which assures that the diamonds are ethically sourced and are unaltered by heat-treating or cavity filling.

Lawrence R. Simkins, President of Washington Companies said, “Dominion Diamond has an excellent collection of mining assets and a talented and experienced management team and workforce. 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.”

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