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Battle for Gemfields Heats Up
Jun 21, 2017 7:19 AM
By Rapaport News
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 RAPAPORT... Pallinghurst Resources has upped the ante in the bidding war
for Gemfields by lowering the number of shareholder acceptances it needs for
its offer to acquire the gemstone miner.
Pallinghurst dropped the “acceptance condition” to 60% from
75% following discussions with the UK’s Panel on Takeovers and
Mergers, the private-equity group said Tuesday. This meant Pallinghurst was
able to declare its $268.4 million (GBP
211.5 million) bid unconditional, since it already had agreements
from 61% of shareholders — though Gemfields pointed out that the offer was
still dependent on voters’ approval at Pallinghurst’s general meeting
next Monday.
Gemfields’ independent committee has described the
Pallinghurst bid as “derisory” and claimed it undervalues the company. In an
update Wednesday, the miner said the terms of the offer meant shareholders might
not grant Pallinghurst the necessary majority next week to go ahead with the
deal.
A takeover by Pallinghurst, currently the miner’s largest investor, “would materially dilute
Gemfields shareholders with inferior assets,” the miner warned. The committee
also cautioned that Pallinghurst did not currently have enough shareholder
backing to fulfill its plan to delist Gemfields from the London Stock
Exchange’s Alternative Investment Market.
“The potential inability for Pallinghurst to delist the company
[after closing the deal] would appear to be at odds with Pallinghurst’s
rationale for the transaction,” the committee added.
China’s Fosun Gold is also in the running to buy Gemfields.
On Tuesday, it raised its bid by 10% to $323.8 million (GBP 256 million).
Gemfields’ management said the Shanghai-based group’s offer was unreasonable,
but still recommended shareholders accept the deal, which it said was a better
alternative to Pallinghurst’s proposal. |
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Tags:
colored gemstones, Fosun, Fosun Gold, Gemfields, gemstones, M&A, mergers and acquisitions, mining, Rapaport News
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