Following the offer by Pallinghurst Resources to acquire the entire issued share capital of Gemfields it has announced valid acceptances in respect of Gemfields shares.

Together with the 208 502 556 Gemfields shares (representing 37.83% of the issued share capital of Gemfields) already held by dual-listed Pallinghurst Resources, this represents 414 355 757 Gemfields shares (approximately 75.18% of the issued share capital of Gemfields).

[quote]“I am delighted that more than 75% of Gemfields shareholders – including the majority of the Gemfields minorities – have already accepted the Pallinghurst Resources offer,” comments Pallinghurst Resources CEO, Arne H. Frandsen.

“In combination with the 96% support from Pallinghurst shareholders, it is clear that the proposed transaction has the broadest support from both sets of shareholders.

“In addition, the Fosun offer backed by Gemfields management has lapsed. Hence, once we’ve had the first closing on July 4th, we will move to delist Gemfields,” he adds.

The offer remains open for acceptances by the shareholders of Gemfields until the closing date of 13h00 (London time) on 4 July 2017.

Further to the announcement by Pallinghurst Resources the independent committee of the board of Gemfields notes that the ordinary resolution required to approve the unsolicited offer from Pallinghurst Resources was passed by the requisite majority of Pallinghurst shareholders, and as such that Pallinghurst has declared the unsolicited Pallinghurst offer to be wholly unconditional.

The independent committee believe that the unsolicited Pallinghurst offer significantly undervalues Gemfields and its prospects as a leading player in the coloured gemstone sector and denies Gemfields shareholders the ability to realise the material future upside potential of the company on a standalone basis.

Given the level of acceptances that Pallinghurst Resources has received to date, and the current shareholding held by Pallinghurst, the independent committee notes that Pallinghurst is, as yet, not in a position to procure cancellation of the admission of Gemfields shares to trading on AIM.

Given the considerations outlined above, the independent committee continue to strongly recommend that Gemfields shareholders take no action at this time such that they can continue to benefit from direct exposure to Gemfields through their existing quoted shares, thereby avoiding being diluted with inferior assets that offer exposure to more volatile commodities and with less attractive prospects.

Feature image credit: Pallinghurst Resources