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Dominion, Stornoway in Merger Talks: Report

Mar 22, 2017 10:25 AM   By Rapaport News
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RAPAPORT... Dominion Diamond Corporation and Stornoway Diamond Corporation have held discussions over a merger, Reuters reported this week, as Dominion continued to denigrate a separate takeover offer from the Washington Companies.

The merger talks cover the possibility of Stornoway chief executive officer Matt Manson (pictured) filling the soon-to-be vacant CEO role at Dominion, the report said. Discussions started in January, Reuters cited one source as saying, adding that another said talks were still ongoing.

Dominion and Stornoway both declined to comment on the report.

A union between the two would combine three significant mining assets in Canada under one roof, with Stornoway having opened the Renard mine in Quebec last October. Dominion owns the Ekati deposit in the Northwest Territories and has a 40-percent stake in the region’s Diavik deposit.

The report came as Dominion confirmed it was prepared to enter discussions with Washington, a diamond-industry outsider that had approached the miner with a proposal for a $1.1 billion takeover. On Wednesday, Dominion said Washington had not made a formal offer, and reaffirmed an earlier statement from Sunday that the approach was “opportunistic” and undervalued the company.

Dominion also said Washington had demanded a veto on the choice of replacement for the miner’s CEO, Brendan Bell, who is set to leave by June 30. Washington, however, insisted it had only requested that Dominion avoid appointing a CEO during an exclusivity period, according to a letter it sent to Dominion chairman Jim Gowans and which the mining company released on Wednesday.

Letters between Gowans and Washington president Lawrence Simkins indicate “the aggressive and off-market terms and conditions proposed by WashCorps [Washington Companies],” Dominion argued.
Tags: Brendan Bell, Diavik, Dominion, Dominion Diamond Corporation, ekati, Jim Gowans, Lawrence Simkins, Matt Manson, merger, northwest territories, quebec, Rapaport News, renard, stornoway, Stornoway Diamond Corporation, Washington, Washington Companies
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