Dominion Diamond offers itself for sale after unsolicited $1.1B bid
Stocks hit $17.80 per share after company announces plan Monday
Dominion Diamond Corporation's stocks rose again Monday after announcing it would listen to offers from potential buyers for the company.
Shares in the mining company rose after the company announced the decision in a statement Monday morning.
Dominion Diamond operates the Ekati mine and owns 40 per cent of the Diavik mine through a joint venture with Rio Tinto PLC. Both mines are located in the Northwest Territories, about 300 km northeast of Yellowknife.
It's the latest development for the company since an unsolicited $1.1-billion purchase proposal from the Montana-based The Washington Companies was disclosed March 19.
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Dominion Diamond called that proposal "highly opportunistic" and said it was a self-interested bid for The Washington Companies to look at its books. Dominion Diamond has since released all its correspondence with The Washington Companies and shareholders have reportedly called for Dominion Diamond to open up its books to potential suitors.
"Dominion's put themselves up for sale and are saying, 'If you're interested in buying, step up,'" said Paul Zimnisky, an independent diamond industry analyst based in New York.
"This was driven by shareholder pressure but the question is, could they be in talks with another party that's approached them since the Washington bid?"
Dominion Diamond stocks peaked at $17.81 Cdn ($13.32 US) a share Monday, largely a result of Dominion's decision to open itself up, Zimnisky said.
Though Washington's proposal appears to remain on the table, Zimnisky said he believes another diamond mining company would be a better fit for Dominion's board of directors.
"Dominion would rather do a deal with someone else in the industry or another mining company," he said.
"This is indicative they are in talks with another mining company or someone they're doing a deal with."