By Martin Kidston/Missoula Current
The Washington Companies said this week it has bid $1.1 billion to acquire a Canadian-based mining company, an offer that was made public after private talks hit an impasse.
Washington Cos., based in Missoula, initially made its proposal to the Dominion Diamond Corporation’s board of directors in February, though the board has stalled the offer.
“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,” Lawrence Simkins, president of Washington Cos., said in a statement. “We remain fully committed to completing this transaction.”
Under the proposal, Washington Cos. would acquire all of the outstanding common shares of Dominion for $13.50 per share in cash. That represents a 36 percent premium to Dominion’s closing stock price on March 17, and a 54 percent premium to the price when talks ended on March 15, according to Washington Cos.
Simkins said the company has the resources to fund the transaction from existing liquidity. He said he remains hopeful the board will reconsider the offer.
“We believe our proposal is extremely compelling and clearly in the best interests of Dominion and all of its stakeholders, including shareholders, customers, employees, and communities,” Simkins said. “As a part of Washington, Dominion would receive significant, long-term investment to develop its most promising growth assets, creating meaningful opportunities for its employees and the communities in which it operates.”
Dominion Diamond Corp. is a Canadian diamond mining company with ownership interests in two major producing diamond mines. Both mines are located in the “low political risk” environment of the Northwest Territories in Canada.
The company operates the Ekati Diamond Mine, in which it owns a controlling interest, along with 40 percent of the Diavik Diamond Mine. It supplies premium rough diamond assortments to the global market through its sorting and selling operations in Canada, Belgium and India.
Dominion’s board issued a statement this week calling the Washington Cos. disclosure of its offer “self serving.” The board was forced to admit that it had received an “unsolicited, conditional and non-binding” expression of interest from the Missoula-based company.
“The Board confirmed that WashCorps does not have experience in the highly specialized diamond mining and marketing industry,” the board’s statement said. “WashCorps also advised that they did not have any unique plans for the business.”
Washington Cos. said it was particularly interested in developing Dominion Diamond’s Ekati Diamond Mine northeast of Yellowknife. Dennis Washington has a net worth of $4.6 billion, ranking No. 375 on the Bloomberg Billionaires Index.
Contact reporter Martin Kidston at firstname.lastname@example.org