Dominion Diamond to Explore Sale as Shareholders Revolt

Mining and Exploration
22/12/2015 17:40

From BloombergBusiness: "Dominion Diamond Corp. has hired financial advisers to explore a sale as the Canadian miner comes under pressure from shareholders about its falling share price, according to people familiar with the matter. The shares surged the most since 2009. The diamond miner has hired Rothschild & Co. to advise on the sales process, said the people, who asked not to be identified because the matter is private. The deliberations aren’t final and may not lead to a deal, the people said. Dominion Diamond has been targeted by a group of shareholders, led by Toronto-based hedge fund K2 & Associates Investment Management, which sent a letter to the board Monday criticizing the company’s management and business strategy. The group requested a meeting to discuss changes to the company’s operations, including a strategic review.

The shares climbed 22 percent to C$14.02 in Toronto at 10:53 a.m., giving it a market value of about C$1.2 billion ($860 million), after earlier surging as much as 24 percent. The company’s shares had fallen 45 percent this year before today. The shareholder group, which collectively holds 5.4 percent of the company’s shares, said that the stock price has suffered 'excessively and unnecessarily as a result of misguided policies and missed opportunities.'”