Category Archives: GEM BUYERS

China’s Fosun sweetens the pot for offer on Gemfields

Emeralds and rubies miner Gemfields (LON:GEM) is encouraging its minority shareholders to accept an improved takeover bid from China’s Fosun International, despite considering it unfair, to avoid being bought-up by its largest shareholder.

The London-listed miner told investors Tuesday that while the terms of Fosun’s proposal are “not fair or reasonable,” the offer from South African private equity group Pallinghurst, Gemfields’ biggest shareholder, is even more “derisory.”

The precious stones miner has recommended shareholders to accept Fosun’s new offer, despite considering it “unfair” and “unreasonable.”Fosun Gold, a unit of Fosun International, increased Tuesday its offer for Gemfields to 45 pence per share from an earlier proposal of 40.85 pence per share. That’s an 18% premium compared to Gemfields’ share price before it first announced it had received an unsolicited bid.

The sweetened offer trumps Pallinghurst Resources’ rival bid of 38.5 pence to acquire the 53% of the coloured gems producer it does not already own.

Fosun chief executive Wang Qunbin said his company was impressed by Gemfields’ “long-term business potential, in particular in the China market”, adding that its cash offer provides a “compelling alternative” to Pallinghurst’s all-share bid.

Gemfields’ board did not share Qunbin’s enthusiasm, noting that Fosun’s new bid still represents an 18% discount to where the company’s shares traded only six months ago.

It also said it would to pay the Chinese miner a break fee of $2 million by way of compensation if a competing proposal becomes or is declared wholly unconditional.

Shares in the company jumped almost 5% in the first hour of trade in London to 43.50 p and while it lost a few points later, it was still 4.62% higher to 42.50 p by 3:00 PM local time.

Gemfields, which owns the luxury Fabergé jewellery brand, is the world’s biggest coloured gems producer, accounting for roughly a third of the world’s emeralds and rubies from two mines in Mozambique and Zambia.

Last week, the company broke its own record by achieving the highest revenue from its latest auction of rough rubies.

Henry Sapiecha

Gemfields steps up fight against takeover by largest investor


Actress Mila Kunis is Gemfields’ brand ambassador. (Image: Screenshot from Gemfields 2014’s advert| YouTube)

Emeralds and rubies miner Gemfields (LON:GEM) said Wednesday a group of independent directors recommended shareholders to reject a takeover bid by largest investor Pallinghurst Resources Limited.

The Johannesburg-listed private equity firm wants to buy all the shares it doesn’t already own in Gemfields, but an “independent committee” formed by the precious stones miner has determined the offer “significantly undervalues the company, its unique asset base and its leading position in the coloured gemstone sector.”
“Pallinghurst Resources wants to buy all the shares it doesn’t already own in Gemfields, but miner said offer is “derisory.””

Shares in Gemfields fell on the news, closing 1.10% down in London to 33.75p.

The group of advisers is made up of chairman Graham Mascall, chief executive Ian Harebottle, chief financial officer Janet Boyce and non-executive directors Clive Newall and Finn Behnken.

Despite their close ties with Gemfields, the company said it considered the committee to be “free from conflicts of interest in respect of the unsolicited offer”.

Gemfields is the world’s biggest coloured gems producer, accounting for roughly a third of the world’s emeralds and rubies from two mines in Mozambique and Zambia. The miner also owns the luxury Fabergé brand.

Pallinghurst also has interests in the platinum and manganese sector in South Africa, but Gemfields is the assets where it has the largest share. The firm has until June 16 to release full details of its offer for Gemfields under Takeover Panel rules.

Henry Sapiecha