Gemfields cancels share trading on AIM, given Pallinghurst breakthrough

The world leading color gemstones producer Gemfields Plc, amid takeover conflict, applied to the London Stock Exchange for the cancellation of admission of its shares to trading on AIM.

The British multinational, with robust portfolio of emerald and ruby assets in Africa, disclosed this in an announcement on 30 June and confirmed : “the 20 business days’ notice period for the cancellation has now commenced”.

The application was made at the request of the JSE listed Pallinghurst Resources Ltd that is in full competition with the Chinese company Fosun Gold so as to takeover Gemfields.

The natural resources investment fund Pallinghurst made unsolicited all-share firm offer to acquire the entire issued and to be issued ordinary share capital of Gemfields plc that it does not already hold.

Under the terms of the offer, each Gemfields Shareholder will be entitled to receive 1.91 Pallinghurst shares for each Gemfields Share.

As holding approximately 75.18% of the existing issued share capital of Gemfields, Pallinghurst declared wholly unconditional the firm offer on the shares of the gemstones producer.

In the 30 June announcement, Gemfields recalled that the unsolicited Pallinghurst offer will remain open to acceptances until 1:00 p.m. (London time) on 18 July 2017.

Days earlier, the Independent Committee of the Board of Gemfields set up to assess offers made it clear that the unsolicited Pallinghurst offer significantly undervalues the company, emphasizing that shareholders should seriously consider whether to accept.

The Independent Committee said that shareholders who anticipate greater value in their Gemfields shares whilst recognising and being willing to accept the risks associated with remaining as an investor in an unquoted company controlled by Pallinghurst may wish to remain as shareholders in Gemfields.

In fact, 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.

However, 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 has a robust global portfolio.

The 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.