Dominion Diamond May Be Sold Following Activist Salvo

Dominion Diamond Corp., owner of the Ekati mine as well as 40 percent of the Diavik mine, is looking for a buyer following criticism of its management by activist investors, Bloomberg reports.

Citing “people familiar with the matter,” the news service reports that the Canadian diamond miner has hired Rothschild & Co. to explore a possible sale.

The news comes after K2 & Associates Investment Management, which owns 5.4 percent of the company’s shares, publicly chastised the company’s management.

The comments came in a Dec. 21 letter from Josef Vejvoda, portfolio manager of K2 & Associates Investment Management, which owns 5.4 percent of the group, to lead director Daniel Jarvis.

“We are cognizant of how market conditions have created headwinds for the industry generally,” the letter says. “But, [K2] believes that [Dominion’s] share price has suffered excessively and unnecessarily as a result of misguided policies and missed opportunities.”

Among the “missed opportunities” it cites: diamond marketing; business strategy; and corporate governance.

In a statement, Dominion said it “values constructive input” about increasing shareholder value and “looks forward to an open dialogue” with the group.

JCK News Director