Dominion Diamond Corp. Jumps 26% On News Of Unsolicited Purchase Offer By The Washington Companies
The Washington Companies announced yesterday (Sunday) that it made an unsolicited all-cash $1.1 billion offer to the board of directors of mining company Dominion Diamond Corp. (NYSE:DDC; TSX:DDC) on Feb. 21 to acquire all of the company's outstanding common stock for $13.50 a share but that subsequent discussions broke down. Today, Dominion's share price closed up 26% on the news.
Lawrence Simkins, president of Missoula, Montana-based Washington, a group of privately held North American mining, industrial and transportation businesses founded by Dennis Washington said in a statement:
"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. We remain fully committed to completing this transaction."
Yellowknife, Canada-based Dominion said in a statement late on Sunday that its board had considered Washington's unsolicited offer but that the terms of the proposed talks were unusual and unacceptable, including, according to the statement, the ability to see confidential information that could later be used for a proxy fight to take over the company, and the ability to veto the board's choice of the new chief executive officer concluding that:
"The Dominion Board is more than willing to consider all value-creating opportunities for the Company, but it will not do so to the detriment of its shareholders and other stakeholders. The Board of Directors reiterates its openness to engage with WashCorps on customary terms."
The offer price of $13.50 Canadian represented a 36% premium to Dominion's closing stock price on March 17 and a 54% premium to the price when discussions ended on March 15, according to Washington. Dominion's share price jumped 26% to $16.27 today on the news.
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