Botswana President Duma Boko will declare the Global Diamond Consortium (GDC) the preferred bidder for De Beers at his annual State of the Nation address on Monday, a source close to the matter told Rapaport News.
In the speech – which will take place at 2 p.m. local time – Boko will likely disclose “high-level terms” of a preliminary deal for the GDC to acquire the miner, according to the source. There will then be a period in which Anglo American, Botswana and the consortium negotiate the details and resolve outstanding disagreements, he added.
The GDC, which former De Beers CEO Gareth Penny leads, has been the frontrunner to buy De Beers for several months. Its main backers in the trade are Antwerp-based sightholders Pluczenik and Diarough, with Signet Jewelers, Richemont and a range of other industry members and governments also potentially joining the consortium’s bid. Rosy Blue, another sightholder, is now unlikely to participate, according to a different source.
The initial source expects Boko to confirm that the GDC will make a $750 million up-front payment and a $250 million deferred payment for Anglo American’s stake in the diamond company. The president may also pressure the GDC to give Botswana a 30% stake at no extra cost, up from the 15% it currently owns and higher than the 25% the parties have reportedly discussed.
“Boko is known for negotiating in public rather than in private,” the source commented.
Other deal terms under discussion include the GDC injecting $500 million into De Beers to run the company, and paying a $75 million nonrefundable deposit at an undetermined time, according to the same source.
The Anglo American negotiating team will be in Gaborone for the president’s address, and current and former bidders were invited.
Anglo American owns 85% of De Beers, which it has been looking to sell for more than two years.
Neither Anglo American, De Beers, the Botswana government, nor a spokesperson for the GDC responded to a request for comment by press time.
Image: A rough diamond at De Beers’ Global Sightholder Sales offices in Gaborone, Botswana. (Ben Perry/Armoury Films/De Beers)
