Gemfields advises shareholders to reconsider Pallinghurst deal

JOHANNESBURG (miningweekly.com) – Gemfields on Wednesday advised its independent shareholders to “seriously consider” whether to accept Pallinghurst’s all-share offer.

Pallinghurst on Tuesday said it had received acceptances for the offer exceeding 75%.

Gemfields independent committee chairperson Graham Mascall said that, despite the committee’s best efforts to provide minority shareholders with a more attractive materially higher cash offer from Fosun Gold, the offer has lapsed, as a result of the Pallinghurst offer going wholly unconditional.

The committee noted in a circular to shareholders, issued late on Tuesday, that it still believes the Pallinghurst offer undervalues Gemfields and denies Gemfields shareholders the ability to realise the material future upside potential of the company on a standalone business.

It stated that it could not recommend the offer from a value perspective.

It added that shareholders who anticipate greater value in their Gemfields shares, while 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.

“However, given the risks and uncertainties outlined above, the independent committee has concluded that independent shareholders should seriously consider whether to accept the Pallinghurst offer, despite the independent committee's firm view that it significantly undervalues Gemfields.”

The Pallinghurst offer is expected to remain open for acceptances until July 18.