The battle for the takeover of coloured gemstone miner Gemfields has hotted up, with Hong Kong-based Fosun Gold raising its offer to £256 million in cash from the £224.6 million offered a week ago.
Fosun’s all-cash second offer places a 10.8 percent premium on Gemfields’ share price on June 19. The Gemfields board says the Fosun offer also is not “fair and reasonable”, it has, however, recommended the bid to shareholders since it is materially more attractive.
Pallinghurst has in response, lowered its acceptance threshold to 60 percent of the Gemfields shareholding, thus making its offer now unconditional.
Fosun Gold’s offer was a solicited one, being sought by the Gemfields board as an alternative to an unsolicited one from Pallinghurst Resources, which already owns 47 percent of Gemfields. The Pallinghurst offer was an all-share swap for Pallinghurst’s own stock, offered no premium on the Gemfields share price, valued Gemfields at £211 million, and was conditional on Pallinghurst’s holdings rising to a minimum of 75 percent.
Pallinghurst intends to delist Gemfields from London’s Alternate Investment Market (AIM) and take it private.
Minority shareholders were up in arms against the bid, saying it significantly undervalued Gemfields. A committee of independent directors formed by the board, concurred that the Pallinghurst offer undervalued Gemfields.
The board then sought an alternate suitor for Gemfields and Fosun Gold agreed to come to the party.
https://www.gemkonnect.com/news/gemfields-board-recommends-fosun-offer-despite-terming-it-unfair