Winspear Diamonds Inc. agreed Monday to an increased takeover bid from De Beers of $205.7 million ($305 million Canadian). De Beers increased its offer to C$5 cash per share after the original C$4.25 per share bid was dismissed as hostile by Winspear management.
The completion of the deal is dependent on De Beers receiving at least 50.1% of Winspear shares by midnight Aug. 25, 2000. The Winspear board unanimously endorsed the deal, and Winspear directors agreed to irrevocably deposit their 9.4 million shares, slightly over 15% of outstanding Winspear shares. "We are pleased that De Beers recognizes the value and potential of the Snap Lake diamond deposit, and we concur with our advisers that this revised C$305 million offer is fair to the shareholders," says Randy Turner, president and CEO of Winspear.
Winspear holds a 68% stake in the Snap Lake diamond project in Canada. Snap Lake is Canada's first underground diamond mine, and De Beers has unmatched experience in this area. Winspear's pre-feasibility study of the project indicated the property could produce 22 million carats over 12 years, and additional data released by Winspear suggests the project has even greater potential. Snap Lake is viewed as De Beers' only viable opportunity of becoming a Canadian diamond mine operator in the near future.
- by Julia M. Duncan