NEW YORK — Tiffany & Co. said on Tuesday that it sold its eight million shares, or 13.9 percent stake, in Aber Diamond Corp.
The sale comes a day after reaching an agreement with Aber to raise the price at which Tiffany buys diamonds from Aber to market value and lift certain limitations on the disposal of Aber shares. Tiffany sold its entire holdings in a private offering to institutional investors. The net proceeds of the transaction are approximately $268 million.
The Diamond Supply Agreement between Tiffany and Aber remains intact, and Tiffany is expected to continue buying at least $50 million worth of rough diamonds a year. However, the agreement means Tiffany will purchase these stones at market value rather than at a discount as it had prior to the new arrangement. The supply agreement terminates in 2013.
Tiffany had bought the stake in Aber in 1999 to help it develop the Diavik Diamond Mine in Yellowknife, Canada. Aber controls 40 percent of the Diavik mine and has a majority stake in Harry Winston Inc.
“We accomplished our strategic objective when we provided the funds to enable Aber to develop its interest in the Diavik mine, thereby obtaining a supply of rough diamonds,” said a Tiffany spokeswoman. “The supply arrangement remains in force, and there is no longer any strategic need for Tiffany to maintain that investment.”
This story first appeared in the December 8, 2004 issue of WWD. Subscribe Today.