The board of directors of Dia Met Minerals Ltd. accepted an all-cash purchase offer from Australian mining company BHP Ltd. totalling $687 million Canadian. BHP will pay C$21 for all outstanding shares of Dia Met. The offer is a 23% premium over the Oct. 16, 2000, closing price of the class A shares and a 15% premium over the same-day closing price of the class B shares.
The deal will give BHP an 80% stake in the Ekati mine, Canada's first and only producing diamond mine. BHP already owns 51% of Ekati and will gain Dia Met's 29%. The mine produced 2.6 million carats of diamonds in 2000 and is located northeast of Yellowknife in Canada's Northwest Territories.
The sale of Dia Met was initiated last October when the company's two largest shareholders declared they would sell their stakes. The Dia Met board has recommended shareholders tender their shares, and the buyout is subject to the condition that at least 75% of each class of shares are tendered.
- by Julia M. Duncan