Market Chatter: Harry Winston, KKR, Apollo Said to Consider Bids for BHP Mine


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Harry Winston Diamond Corp. (HW.TO, HWD) and groups led by KKR ( KKR ) & Co. and Apollo Global Management LLC are in talks to buy BHP Billiton Ltd.'s Ekati diamond mine in Canada, said two people with knowledge of the matter, according to a Bloomberg report.

The sale may fetch $500 million to $750 million and an agreement could be struck in about a month, said the people, who declined to be identified as the process is private, according to Bloomberg. Apollo has teamed up with former Stornoway Diamond Corp. ( SWY ) Chairman Eira Thomas to pursue Ekati, the people said.

BHP, the world's biggest mining company, said Nov. 30 it may sell some or all of its diamond operations, Bloomberg noted. Ekati, in Canada's Northwest Territories, produces about 11% of the world's diamonds by value and about 3% by weight, according to the company's website. The mine is valued at $300 million to $500 million, Tim Gerrard, a Sydney-based analyst at Investec Securities Ltd., said Jan. 6.

Canada's Harry Winston has a 40% stake in the nearby Diavik mine and Rio Tinto Group owns the rest. Harry Winston Chief Executive Officer Bob Gannicott said on a Dec. 9 conference call that BHP's Ekati mine is "of some interest", adding that the asset "is close to the end of its existing life."

KKR and Apollo, both based in New York, have made investments in natural resources in recent months. A group led by KKR last year paid $7.2 billion for Oklahoma-based oil company Samson Investment Co. while Apollo agreed last month to acquire El Paso Corp. ( EP )'s oil- and gas-exploration unit for $7.15 billion.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: EP , KKR , SWY

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