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Gemfields Receives Chinese Takeover Bid
Jun 14, 2017 5:24 AM
By Rapaport News
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RAPAPORT... China’s Fosun conglomerate has put in a rival bid to take
over Gemfields, following an earlier offer by the colored-gemstone miner’s
largest shareholder.
Fosun Gold, a subsidiary of the Shanghai-based holding
company, has proposed to buy Gemfields for $0.52 (GBP 0.409) per share,
representing a 15.1% premium over the miner’s closing share price on
Tuesday.
The initial offer is 10.1% higher than a $270.4 million (GBP
211.5 million) bid by main investor Pallinghurst Resources last month. Fosun
said its bid “would provide Gemfields shareholders with a compelling cash
alternative at a significant premium to the Pallinghurst offer,” according to a
Gemfields stock-exchange filing Wednesday.
An investment in Gemfields would complement its other
consumer businesses and enable the miner to improve its access to the growing
Chinese market, Fosun explained.
“Fosun has noted the increasing size of the precious-stones
market as consumers in China and other emerging markets increasingly
demonstrate their wealth, status and emotional commitment to one another
through jewelry and luxury goods, as well as the growing use of engagement
rings,” the bidder said.
The steadily rising auction prices Gemfields has been seeing
for its emeralds, rubies and sapphires support that trend, Fosun continued,
also noting “the increasing sales volumes that have been achieved through its strategy
of consistent, high-quality production and auctions.”
Gemfields said it was “actively engaged” in discussion with
Fosun and advised shareholders not to take action in relation to the offer.
Last month, Fosun acquired a stake in Polyus Gold, Russia’s
largest gold producer. |
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Tags:
China, colored gemstones, Fosun, Fosun Gold, Gemfields, Pallinghurst, Pallinghurst Resources, Rapaport News, shanghai
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