Dominion called the offer "opportunistic."
The Washington Cos. recently offered $1.1 billion for Toronto-based mining company Dominion Diamond Corp.
Dominion (NYSE: DDC) called the offer "opportunistic." In a statement, Dominion said its board believes the offer "does not recognize all of the value in the Company under its current business plan."
Washington noted in a press release that its offer of $13.50 per share in cash represented a 36 percent premium to Dominion’s closing price on March 17, and a 54 percent premium to the price when discussions ended on March 15. Washington is a group of privately held North American mining, industrial and transportation businesses founded by Dennis R. Washington.
Dominion said Washington demanded "a lengthy period of exclusivity" and the ability to veto the board’s choice of a new CEO. Washington also "refused to accept a customary form of standstill that would restrict it from using the confidential information to acquire control of the Company," according to Dominion's statement.
In effect, Washington "is seeking a self-interested 'free option' to learn of Dominion’s business and prospects, while paralyzing the Company."
Dominion said it "reiterates its openness to engage with WashCorps [Washington Cos.] on customary terms."
The Washington Cos. stated: "After multiple discussions and concessions made by Washington over a three-week period, Dominion’s board of directors continues to refuse to grant Washington access to due diligence, which Washington has stated could lead to an increased offer price, on terms acceptable to Washington."
The group said its offer is not contingent on financing.
"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," said Lawrence R. Simkins, president of Washington. "If the transaction is consummated, it would provide Dominion shareholders with a substantial cash premium and offer superior value to that which Dominion could realize through ongoing execution of its plan or any other available alternative transaction. 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."