Dominion Diamond, Stornoway held merger talks: sources

Mon Mar 20, 2017 8:28pm EDT
 
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By Nicole Mordant and John Tilak

VANCOUVER/TORONTO (Reuters) - Dominion Diamond Corp DDC.TO DDC.N and fellow Canadian diamond miner Stornoway Diamond Corp SWY.TO have held talks about a potential merger in recent months, people familiar with the matter said on Monday.

World No. 3 diamond miner Dominion, target of a $1.1 billion bid by U.S. billionaire Dennis Washington, and Stornoway, a small miner with a diamond mine in Quebec, declined to comment. The people declined to be named as the discussions are private.

One of the people said the talks were still ongoing.

The talks include Stornoway's chief executive officer and president, Matt Manson, becoming CEO of the merged group, one source said, adding that the discussions on an all-share merger started in January.

Dominion, which owns the Ekati diamond mine in Canada's Northwest Territories and a 40 percent stake in the nearby Diavik mine, is looking for a new CEO after announcing on Jan. 30 that Brendan Bell had resigned.

A union with Dominion would give Stornoway, which owns a single mine, an avenue for growth, the sources said.

On Sunday, The Washington Companies, a group of privately held North American mining, industrial and transportation businesses founded by Dennis Washington, announced that it had made a $1.1 billion all-cash proposal for Dominion.

Dominion said in a statement late Sunday that its board had considered Washington's unsolicited proposal, but the terms of the proposed talks were unusual and unacceptable.   Continued...