Ad-hoc committee recognizes Pallinghurst’s strong position to takeover Gemfields

The Independent Committee of the board of Gemfields acknowledged Tuesday that the cash offer from the Chinese Fosun Gold lapsed on Monday as a result of the Pallinghurst Resources offer going wholly unconditional.

This, despite the combined best efforts with Gemfields advisers to “provide minority shareholders with a more attractive materially higher cash” offer from Fosun Gold, Committee’s chairman Graham Mascall explained.

He stressed they continue to maintain that the unsolicited Pallinghurst Offer “significantly undervalues Gemfields”.

Chairman Graham Mascall said : “However, in light of Pallinghurst’s current holding and acceptances exceeding 75%, largely as a result of Pallinghurst concert parties accepting the offer, we are now of the view that Gemfields shareholders should seriously consider whether to accept Pallinghurst’s all share offer”,

“The alternative is to hold shares in what is likely to become an unquoted Gemfields." he concluded.

His appreciation is consequential to the breakthrough of Pallinghurst that received 96% shareholder support, during general meeting on 26 June, to takeover Gemfields Plc, a global leading gemstones producer with robust assets in Africa.

The private equity company with investments in the mining sector also garnered supports from other Gemfields shareholders and increased to 75.18% its possession of the existing issued share capital of Gemfields.

On Tuesday, the AIM lised Gemfields saw a stock closing price in decline while Pallinghurst’s CEO Arne H. Frandsen was claiming the equity company’s management “has been given a clear and emphatic mandate”, as over 96% of the voting shares at the general meeting on 26 June were in favour of the acquisition of Gemfields.

“As management, we value and respect this vote of confidence from our shareholders, and will carry out this mandate without delay”, he said.

Pallinghurst’s offer values each Gemfields Share at 36.42 pence and values the entire issued ordinary share capital of Gemfields at approximately £201 million.

But Fosun offered 45 pence in cash for each Gemfields Share, valuing Gemfields’s existing issued and to be issued share capital at approximately £256 million.

The AIM listed Gemfields is an Aladdin’s cave like company for color gemstones as it global portfolio includes 75% ownership of both world-class Kagem emerald mine in Zambia and Montepuez ruby mine in Mozambique, 50% interest in the Kariba amethyst mine in Zamabia and 100% of Fabergé Ltd, one of the world’s most recognised luxury brand names.