The Washington Companies, a group of privately held mining, industrial and transportation businesses founded by entrepreneur Dennis Washington, announced that they have agreed to buy the Dominion Diamond Corporation, which owns 80 percent of the Ekati mine and partners Rio Into with a 40 percent holding in the Diavik mine in Canada’s Northwest Territories for $1.2 billion.
The deal, which works out to $14.25 per Dominion share, represents a 44 percent premium on Dominion’s unaffected share price of $9.92 on March 17.
Dominion’s board has approved the sale and has recommended that all shareholders vote in favour of the deal.
“Dominion Diamond has an excellent collection of mining assets and a talented and experienced management team and workforce,” said Washington President Lawrence R. Simkins, adding, “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.”
Dominion Chairman Jim Gowans observed, “The Washington offer delivers compelling and immediate value to Dominion shareholders at an attractive premium that recognises the intrinsic value of Dominion and provides shareholders certainty through an all-cash offer.”
Gowans added, “Dominion also believes this transaction is an excellent outcome for the company’s stakeholders, including employees, community members and the Northwest Territories. The transaction allows the operation to take the next steps in mine development and ensures mining and its associated benefits continue in the north for decades to come.”
As part of this acquisition, Washington plans to:
Operate Dominion as a standalone business as Washington does with its other successful operating companies.
Appoint a new CEO based in Canada to the Dominion management team
Keep Dominion’s headquarters in Canada and maintain a significantly Canadian management team.
Deploy capital to develop both the Jay and Fox Deep projects and make new investments in a reinvigorated greenfield exploration program.
The sale agreement is subject to customary non-solicitation provisions, including Dominion’s right to consider and accept superior proposals as well as the approval of at least two-thirds of the votes cast at a special meeting of Dominion shareholders.
https://www.gemkonnect.com/news/washington-group-agrees-buy-dominion-diamond-12b