The Washington Companies Makes Bid to Acquire Dominion Diamond for $1.1 Billion
The Missoula-based Washington Companies, a privately held conglomerate of mining and transportation assets founded by billionaire Dennis Washington, has announced it is at a negotiating impasse with a Canadian diamond-mining company over a $1.1 billion purchase bid.
A statement from the Washington Companies on Monday announced that it submitted a proposal to acquire Toronto-based Dominion Diamond for $13.50 a share on Feb. 21, but Dominion has not accepted the offer.
Dominion has ownership interest in two major diamond mines in Canada’s Northwest Territories. Along with Montana Rail Link and many other businesses, Washington Companies owns and operates Montana Resources, which is an open-pit copper and molybdenum mine in Butte, one of the largest in North America.
The unsolicited offer, which was made to Dominion’s board of directors, was for $13.50 per common share in cash. Dominion was trading on the New York Stock Exchange for $12.20 on Monday afternoon, up from $8.83 at the end of trading last week.
Lawrence Simkins, president of Washington Companies, said in a statement that if the transaction was consummated, it would be in the best interests of Dominion and all its shareholders, customers, employees and communities.
“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,” Simkins said.
However, Dominion said in a statement that Washington Companies has a “lack of credibility” in the diamond industry and with public company acquisitions.
“Based on the presentation received from WashCorps, and by their own admission, the Board confirmed that WashCorps does not have experience in the highly specialized diamond mining and marketing industry,” Dominion said. “WashCorps also advised that they did not have any unique plans for the business.
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“Regardless, the Dominion Board carefully considered the expression of interest, including with the benefit of legal and financial advice. While the Board considered the expression of interest to be opportunistic, and believes that it does not recognize all of the value in the Company under its current business plan, the Board told WashCorps that it was prepared to engage in discussions with them on customary terms, including a customary standstill, and allow WashCorps to conduct extensive due diligence on Dominion’s unique assets and growth potential in order to improve their expression of interest.”
When Washington initially made the offer to Dominion, it said in a letter that it was basing its proposed purchase price on “knowledge of (Dominion) from publicly available sources.”
“Given the Company’s recent update on fiscal 2018 guidance and the complexity of Dominion’s assets, to indicate that diligence is confirmatory based on public records is highly questionable,” Dominion responded.
The Wall Street Journal reported on Sunday that the stage is set for a “public takeover fight.”
Source: (March 20, 2017) Missoulian
To stop by Washington Companies’ website, CLICK HERE
To stop by Dominion Diamond’s website, CLICK HERE
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