Canada-based mining company Dominion Diamond Corp. (DDC,DDC.TO) said it has entered into an arrangement agreement under which an entity affiliated with The Washington Companies will acquire all of Dominion’s outstanding common shares for $14.25 per share in cash, or a total equity value of about $1.2 billion.
Washington Companies s a group of privately held North American mining, industrial and transportation businesses founded by industrialist and entrepreneur Dennis Washington.
The transaction represents a 44 percent premium to Dominion’s unaffected share price of $9.92 on March 17, 2017. It also marks the result of Dominion’s review of strategic alternatives as previously announced on March 27, 2017.
Dominion’s board of directors has unanimously determined that the arrangement is in the best interests of the company, approved the arrangement and recommends that Dominion’s shareholders vote in favor of the arrangement.
All directors of the company have entered into support agreements to vote their common shares in support of the arrangement.
As part of this acquisition, Washington plans to operate Dominion as a standalone business, appoint a new CEO based in Canada to the Dominion management team, and keep Dominion’s headquarters in Canada as well as maintain a significantly Canadian management team.
If the arrangement is not completed as a result of a superior proposal, Dominion Diamond will be required to pay Washington a termination fee equal to $43.9 million, or approximately 3.75 percent of the equity value.
Should Washington be unable to complete the arrangement due to a funding failure, or in other limited circumstances, Washington will be required to pay the company a reverse termination fee equal to $70.2 million, or approximately 6.0 percent of the equity value.
by RTT Staff Writer
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