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Gemfields Reluctantly Bows to Fosun Takeover Bid

Chinese group’s $324M offer is unfair, but still better than the alternative, says miner.
Jun 20, 2017 9:46 AM   By Rapaport News
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RAPAPORT...
Gemfields’ management has recommended shareholders accept a $323.8 million (GBP 256 million) takeover offer from China’s Fosun Gold, describing it as a better option than an earlier proposal by Pallinghurst Resources.

Gemfields’ independent committee still considers the Fosun offer to be unfair and unreasonable, but finds it more attractive than the Pallinghurst bid, which offered investors no premium on the gemstone miner’s share price, the company said Tuesday.

Pallinghurst, a mining-focused private-equity group, announced last Friday that it had secured acceptances from 61% of Gemfields shareholders, including its own 47% stake.

Fosun has upped its bid by 10% to $0.569 (GBP 0.45) per share since its initial proposal last week. The new offer represents an 18% premium to Gemfields’ share price of $0.48 (GBP 0.3813) at the close of business on May 18, the last business day before Pallinghurst announced its offer.

“Given the challenges that the unsolicited Pallinghurst offer poses to the independent future of the company, and given [its] derisory nature..., the independent committee intends to recommend that shareholders accept the Fosun offer so as to secure a relatively more attractive outcome for their investment,” Gemfields said in its Tuesday statement.

To this end, Gemfields CEO Ian Harebottle and chief financial officer Janet Boyce have agreed to accept the offer in their capacity as shareholders.
Tags: colored gemstones, Fosun, Fosun Gold, Gemfields, gemstones, Ian Harebottle, M&A, mergers and acquisitions, mining, Rapaport News
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