Investing News Network Daily quotes Toronto lawyer Aaron Atkinson in an article discussing the update regarding WashCorps $1.1 Billion Takeover bid for Dominion Diamond.
According to Aaron Atkinson, an M&A partner at Fasken Martineau, that uncertainty is not unusual. “Dominion Diamond is speaking to potential suitors,” he said, “[and] if someone comes in with a proposal that’s attractive … they’ll need to choose whether they want to continue with the status quo.” He added, “it could be a joint venture, it could be a substantial equity investment, it could be any number of things.”
“Those two legislative changes, really what they do is put a lot more power into the hands of the target board,” Atkinson noted. “there’s a huge timing advantage to getting the support of the target board, because … all of a sudden if you’ve got a bid out there you could easily be trumped with a competing bid.” He added, “there’s not as much of a first-mover advantage that there might have been.” Launching a hostile takeover also means ceding the right to do due diligence.
“The question is: do they want to play in that construct, or do they think they have a better shot going outside the auction process and trying to short circuit it a little bit?” Atkinson explained. WashCorps appears to have decided to take the first option.