Dominion Diamond Corp (TSE:DDC, NYSE:DDC) sparkled at the market open after billionaire Dennis Washington revealed he wants to buy the Canadian company.
The two parties have been in talks over a possible deal, pitched at US$12.50 a shares, for weeks but discussions have apparently reached a stalemate, prompting Washington to take the offer straight to shareholders.
The Dominion share price rose 21.6% to C$16.06 in Toronto and 21.8% to US$12.08 in New York.
Washington’s company said it had been thwarted by the board of Dominion in its attempts to be allowed to perform due diligence checks that might have led to a higher offer for the diamond miner.
“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.
Diamond’s board said the offer was “unsolicited, conditional and non-binding” and that it undervalued the company.
“WashCorps continues to demand, as a condition to any discussions, a lengthy period of exclusivity, as well as the ability to veto the board’s choice of new CEO," the Canadian company said.
“In other words, WashCorps is seeking a self-interested ‘free option’ to learn of Dominion’s business and prospects, while paralyzing the company."