Canadian miner Dominion Diamond has been purchased by the Washington Companies, a privately held Montana-based conglomerate founded by 82-year-old billionaire Dennis R. Washington.
The price was $1.2 billion, or $14.25 a share, a 44 percent premium to Dominion’s March 17 share price.
Dominion currently owns the Ekati mine (pictured) in Canada’s Northwest Territories, which it bought in 2012, and 40 percent of the nearby Diavik mine. It was previously known as Aber and Harry Winston, when it owned that retailer.
The news is somewhat surprising given that Dominion’s board previously turned down a $1.1 billion bid from the Washington Companies. In its rejection, the Dominion board called Washington’s offer “generic” and “boilerplate,” complaining that it had no unique plans for the company.
Perhaps as a result, the announcement of today’s sale includes an extensive list of Washington’s plans for the company. Among them: It wants to operate Dominion as a standalone company, keep its headquarters in Canada, and maintain a Canadian management team. It also pledged new investments in exploration, a high-level of environmental stewardship, to honor Dominion’s commitments to local residents, and to continue to promote Dominion’s CanadaMark brand.
“We are excited 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,” said Washington president Lawrence R. Simkins in a statement.
In 2015, Dominion said it had hired financial advisory group Rothschild & Co. to explore possible options, including a sale. It has also been under pressure from activist investor K2, which grabbed 5.4 percent of the company in 2016.
(Image courtesy of Dominion Diamond)