Pallinghurst secures additional acceptance of Gemfields takeover

JOHANNESBURG (miningweekly.com) – As Johannesburg- and Bermuda-listed Pallinghurst Resources continues its takeover bid of 47%-owned coloured gemstones producer Gemfields, the group has secured acceptances totalling over 61.25% of the existing issued share capital of Gemfields.

In addition to Pallinghurst’s own 47.09% stake, or 258.9-million Gemfields shares, the dual-listed group has received valid acceptances representing 14.16%, or 77.8-million shares, from fellow Gemfields shareholders.

In May, Pallinghurst announced its intention to acquire the shares it does not already own, offering 1.91 Pallinghurst shares for each Gemfields share.

Pallinghurst, which plans to delist Gemfields from the LSE’s Aim, believes the prospective asset is constrained by low liquidity, a high cost base, depressed profitability and limited access to equity and debt capital markets.

The company aims to unlock the full potential of Gemfields and improve its trading liquidity through a proposed restructuring and integration that will leave the enlarged group with a larger market capitalisation, an enhanced free float, improved market coverage and an expected improvement in liquidity.

Pallinghurst also plans to narrow its focus on optimising Gemfields’ respective core emerald and ruby operations in Zambia and Mozambique; exploring all strategic alternatives for Fabergé; accelerating the development of its existing portfolio of projects; and improving profitability by pursuing cost reductions across the enlarged group.

Last week, China’s Fosun International made a competing bid for Gemfields, offering 40.85p per Gemfields share, valuing Gemfields at £224.6-million.