Dominion Diamond Corporation Responds to Self-Serving Disclosure of Unsolicited and Conditional Expression of Interest from The Washington Corporations

Dominion Diamond Corporation (TSX: DDC, NYSE: DDC) (the “Company” or
“Dominion”) today confirmed that it has received an unsolicited,
conditional and non-binding expression of interest from the Washington
Corporations (“WashCorps”) to acquire the Company. WashCorps’
preliminary expression of interest is subject to, among other things,
extensive due diligence, negotiation of satisfactory agreements and
regulatory approvals, and is contingent on entering into discussions
with Dominion on aggressive and off market terms and conditions.

WashCorps submitted a three-page, mostly boilerplate, letter to the
Dominion Board on February 21, 2017. Despite the generic nature of the
letter and the lack of credibility of WashCorps in the diamond industry
and with public company acquisitions, the Board consulted with its
advisors and then invited WashCorps to present their expression of
interest to the Board at an in-person meeting of the full Board of
Directors of Dominion (the “Board”), which was held on March 9, 2017.

Based on the presentation received from WashCorps, and by their own
admission, the Board confirmed that WashCorps does not have experience
in the highly specialized diamond mining and marketing industry.
WashCorps also advised that they did not have any unique plans for the
business. Regardless, the Dominion Board carefully considered the
expression of interest, including with the benefit of legal and
financial advice. While the Board considered the expression of interest
to be opportunistic, and believes that it does not recognize all of the
value in the Company under its current business plan, the Board told
WashCorps that it was prepared to engage in discussions with them on
customary terms, including a customary standstill, and allow WashCorps
to conduct extensive due diligence on Dominion’s unique assets and
growth potential in order to improve their expression of interest.

Given the Company’s recent update on fiscal 2018 guidance and the
complexity of Dominion’s assets, to indicate that diligence is
confirmatory based on public records is highly questionable. It would
also be entirely irresponsible of the Company to allow a third party
access to its confidential information without the benefit of customary
agreements that protect the interests of shareholders and all of the
Company’s other stakeholders.

While the Board has repeatedly offered to constructively engage with
WashCorps on customary terms, 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. WashCorps has also
refused to accept a customary form of standstill that would restrict it
from using the confidential information to acquire control of the
Company. These conditions would frustrate the Company’s ability to
establish its senior leadership, would prevent Dominion from pursuing
other value-creating opportunities, beyond the Company’s current
business plan, and would leave WashCorps free to lower its preliminary,
highly conditional expression of interest or take advantage of the
Company’s confidential information to further its own interests through
a subsequent “cashless takeover.” In other words, WashCorps is seeking a
self-interested “free option” to learn of Dominion’s business and
prospects, while paralyzing the Company.

The Dominion Board is more than willing to consider all value-creating
opportunities for the Company, but it will not do so to the detriment of
its shareholders and other stakeholders. The Board of Directors
reiterates its openness to engage with WashCorps on customary terms.

TD Securities Inc. is acting as financial advisor to the Company,
Stikeman Elliott LLP is acting as legal advisor and Kingsdale as
strategic advisors.

About Dominion Diamond Corporation

Dominion Diamond Corporation is a Canadian diamond mining company with
ownership interests in two major producing diamond mines. Both mines are
located in the low political risk environment of the Northwest
Territories in Canada. The Company operates the Ekati Diamond Mine, in
which it owns a controlling interest, and also owns 40% of the Diavik
Diamond Mine. It supplies premium rough diamond assortments to the
global market through its sorting and selling operations in Canada,
Belgium and India.

For more information, please visit www.ddcorp.ca

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