Dominion Diamond Corp. is expected to attract interest from the world’s largest diamond miners after being put in play Sunday by a $1.1-billion [U.S.] hostile takeover proposal from conglomerate The Washington Companies.
Yellowknife-based Dominion owns stakes in the Ekati and Diavik diamond mines in the Northwest Territories, and caught the eye of the private Montana-based company controlled by billionaire Dennis Washington, who made his fortune in construction and now owns tugboats, trains and copper mines.
Washington held takeover talks with Dominion that stretched over three weeks, but broke down earlier this month. Washington went public Sunday with a plan to buy the diamond miner for $13.50 a share, a 36-per-cent premium on Dominion’s Friday closing price. Dominion stock prices jumped 20 per cent yesterday on news of the offer.
Washington president Lawrence Simkins said in an interview that his company plans to install new leadership at Dominion. Dominion is currently searching for a chief executive officer.
Mr. Simkins said Washington believes Dominion’s mines have “intriguing” growth potential under private ownership and “it does not make sense for this company to be public.” Washington does not own Dominion shares, and Mr. Simkins said an investment bank originally suggested making a takeover offer for the mining company.
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