Diamonds from the Ekati mine are seen in this file photo.
The Washington Cos. made a $1.1-billion unsolicited offer for Canada's Dominion Diamond Corp., leading to weeks of talks that have hit an impasse.
Closely held Washington Cos., run by Dennis Washington, made the proposal to acquire Toronto-based Dominion Diamond for $13.50 a share on Feb. 21. Dominion's board has stalled on the offer, Washington Cos. said in a statement Sunday. The bid carried a 36 per cent premium to Dominion's closing price on Friday.
Washington Cos., which has businesses in mining, marine and rail transportation, heavy equipment distribution, said it has a long track record of growing businesses throughout North America, with expertise in the mining industry and the Canadian market. The company said Dominion's board has refused to let it perform due diligence, which might lead to an increased offer.
"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, but we remain fully committed to completing this transaction," said Lawrence Simkins, Washington Cos.' president, in the statement.
A representative for Dominion Diamond wasn't immediately available for comment.
Washington Cos. said it was particularly interested in developing Dominion Diamond's Ekati Diamond Mine northeast of Yellowknife.
BDT & Co. is providing financial advice to Washington Cos. while Skadden, Arps, Slate Meagher & Flom LLP is the legal adviser in the U.S. Blake. Cassels & Graydon LLP is providing legal advice in Canada.
Dominion Diamond has been the topic of takeover talk after the company hired Rothschild & Co. to explore a sale in 2015. That process failed to find a buyer. The company had been targeted at the time by a group of shareholders, led by Toronto-based hedge fund K2 & Associates Investment Management, who criticized the company's management and business strategy.
In January, Dominion Diamond chief executive officer Brendan Bell said he planned to step down at the end of June, citing personal reasons after the company decided to move its corporate offices to Calgary.