(Adds potential suitors, background)
March 27 Dominion Diamond Corp ,
the target of an unsolicited $1.1 billion approach by U.S.
billionaire Dennis Washington, said on Monday that it will
launch a formal sales process for the company, boosting the
company's share price.
The stock rose 3.4 percent on market speculation that global
miners including Rio Tinto and Anglo American's
De Beers unit may now enter the fray and make a bid for
Dominion, the world's third-largest diamond producer by value.
Neither Rio, which is a partner of Dominion's in the Diavik
mine in northern Canada with a 60 percent stake, nor Anglo,
immediately responded to a request for comment.
A source close to Rio said last week that the diversified
miner was not interested in selling its stake in Diavik, if
Washington was interested in acquiring it.
Dominion said earlier that it had formed a special committee
to explore, review and evaluate a range of alternatives,
including the sale of the company.
Four company directors - Trudy Curran, David Smith, Josef
Vejvoda and Chairman Jim Gowans - would sit on the committee.
Dominion said on March 19 that it had considered and
rebuffed a $13.50 a share takeover proposal from The Washington
Companies as the terms to advance talks were unacceptable and
the "opportunistic" bid undervalued the company.
Montana-based Washington is a group of privately held North
American mining, industrial and transportation businesses
founded by Dennis Washington.
M&G Investments, Dominion's biggest shareholder with a stake
of about 11 percent, told Reuters last week that in the wake of
the Washington approach Dominion should run a formal sales
process, opening its books to other potential
Small Canadian producer Stornoway Diamond Corp has
also held merger talks with Dominion in recent months, and one
source told Reuters last week that those talks were ongoing.
Analysts have also speculated that Russian diamond producer
Alrosa and private equity players could be interested in
Dominion, which owns the Ekati diamond mine in Canada's
Dominion's stock was last up 3.4 percent at $13.15 on the
New York Stock Exchange.
(Reporting by John Benny in Bengaluru. Additional reporting by
Nicole Mordant in Vancouver.; Editing by Sriraj Kalluvila and