Dominion will run as a standalone business.
The Washington Cos. plans to buy Dominion Diamond Corp. for $1.2 billion.
“Dominion Diamond has an excellent collection of mining assets and a talented and experienced management team and workforce,” said Lawrence R. Simkins, president of Washington. “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.”
Missoula, MT-based Washington will acquire all outstanding common shares of Dominion (TSX: DDC, NYSE: DDC) for $14.25 per share in cash. The transaction represents a 44 percent premium to Dominion’s unaffected share price of $9.92 on March 17.
Washington is a group of privately held North American mining, industrial and transportation businesses founded by industrialist and entrepreneur Dennis R. Washington. All directors of the company have entered into support agreements to vote their common shares in support of the deal.
“The Washington offer delivers compelling and immediate value to Dominion shareholders at an attractive premium that recognizes the intrinsic value of Dominion and provides shareholders certainty through an all-cash offer,” said Jim Gowans, chairman of the board of Dominion. “This offer is the result of a robust strategic review process and the Board unanimously agrees that this offer represents the best option available to Dominion shareholders, and recommends that shareholders vote in favour of this transaction.”
Washington said in a press release that it plans to operate Dominion as a standalone business and appoint a new CEO based in Canada to the Dominion management team. It will keep Dominion’s headquarters in Canada and “maintain a significantly Canadian management team.”
If the deal is not completed “as a result of a superior proposal,” Dominion will be required to pay Washington a termination fee equal to $43.9 million. If Washington is unable to complete the transaction due to a funding failure, or in other limited circumstances, it will have to pay dominion a fee equal to $70.2 million.