Diamond Trader Makes Hostile Cash Bid for DCC

(IDEX Online News) – Geneva based entrepreneur and jeweler Abdallah Chatila is leading a bid for Diamond Circle Capital, the only public diamond investment fund. Joining Chatila is Pavlo Protopapa.

After a difficult period, which included a sharp drop in the value of its share from $10.45 to $3.00 in a matter less than four months, DCC is becoming attractive.

Chatila is making a cash offer of $3.50 per share. DCC shares are currently trading on the London Stock Exchange at $4.20.

DCC reported a net asset value of $7.25 per share. Its objective is to create long-term appreciation by investing in high-end diamonds worth in excess of $1 million. In February, DCC reported holding 11 diamonds, including a 1-carat fancy red and an 8.76-carat deep fancy green.

Earlier this month DCC reported it made a profit for the first time, $3.4 million.

Yesterday (Tuesday), Chatila purchased 1,272,615 DCC shares from Fortress, and then made the cash bid for the rest of the outstanding shares.

In August 2010, Protopapa and his company Evermay Global purchased nearly 26 percent of DCC's shares. Last February Protopapa resigned from DCC's board

The offer values DCC's total issued share capital at $26 million.

Chatila said he has existing investments in the diamond industry and intends to increase his exposure to diamonds as an asset class.

DCC's board said it would respond to the bid "as soon as reasonably practicable," advising shareholders to no take action in the mean time.