Shares in Gemfields (LON:GEM) got hammered Tuesday after Pallinghurst Resources, the firm largest shareholder, revealed it has secured support to push ahead with its plans to de-list the emerald and ruby miner.
The news comes only a day after Pallinghurst shareholders voted in favour of selling their stakes to the South African private equity group, in a move that removed the last potential stumbling block and nullified a rival offer from China’s Fosun Gold, a unit of Fosun International.
Pallinghurst Resources aims to buy all the shares it doesn’t already own in Gemfields to perform an overhaul of the miner that includes delisting it.
Gemfields told investors it still believes Pallinghurst’s bid “undervalues” the company and its prospects “as a leading player in the coloured gemstone sector.”
“However, in light of Pallinghurst’s current holding and acceptances exceeding 75%, largely as a result of Pallinghurst concert parties accepting the offer, we are now of the view that Gemfields shareholders should seriously consider whether to accept Pallinghurst’s all share offer,” Graham Mascall, Chairman of the Independent Committee created to review the competing bids said in a statement.
“The alternative is to hold shares in what is likely to become an unquoted Gemfields,” Mascall said.
Pallinghurst already owns a 47% stake in the gemstones producer. Its offer, first presented in May, is open to Gemfields shareholders until July 18.
Gemfields, which owns the luxury Fabergé jewellery brand, is the world’s biggest coloured gems producer, accounting for roughly a third of the world’s emeralds and rubies from two mines in Mozambique and Zambia.
Gemfields’ shares fell as much as 13% on Tuesday afternoon, to close 10.88% lower at 31.75p.(Source: Mining.com)