Fosun Gold Makes $325 Million Offer For Gemstone Miner Gemfields
June 20, 17(IDEX Online) – Fosun Gold Holdings Limited has made a cash offer of £256 million ($325 million) for gemstone miner Gemfields plc. Fosun Gold is a subsidiary of Fosun International Limited.
The Fosun offer will be 45 pence in cash for each Gemfields share, which is a premium of 18 percent to Gemfields' share price of 38.13 pence at the close of business on 18 May, the last business day before the announcement of the takeover offer by Pallinghurst Holdings, the largest shareholder in Gemfields.
It is also a premium of 10.8 percent to the Gemfields closing share price of 40.625 pence as at 19 June, the last business day before the date of the Fosun-related announcement; and a premium of 18.2 percent to the current implied share price of 38.08 pence of the Pallinghurst offer.
The Independent Committee of Gemfields: Ian Harebottle (Chief Executive Officer of Gemfields) and Janet Boyce (Chief Financial Officer of Gemfields) have irrevocably undertaken to accept the Fosun offer in the absence of a higher offer for Gemfields emerging.
Fosun Gold believes the Fosun offer provides Gemfields shareholders with a compelling alternative to the Pallinghurst offer because it provides an immediate all cash realization at a significant premium without any on-going exposure to downside risk associated with the all share, nil-premium Pallinghurst offer; Pallinghurst's shares have declined in value by approximately 59 percent since its IPO in 2008; and because the Fosun offer has the support of the Independent Committee, unlike the Pallinghurst offer which is part of the proposed Pallinghurst restructuring which, the Independent Committee has noted, would appear to focus on preserving the Pallinghurst investment managers' own self-interest at the expense of the independent Gemfields shareholders, according to a Gemfields statement.
"Fosun Gold is aware that there is a possibility that the Pallinghurst offer may become or be declared unconditional as to acceptances and/or unconditional in all respects in the near future, for example, if Pallinghurst waives down its acceptance condition to 60% and the Pallinghurst Ordinary Resolution is passed at the Pallinghurst General Meeting. However, Fosun Gold believes that there is the possibility that Pallinghurst will not receive either sufficient acceptances to achieve the 75 percent acceptance level currently required under the terms of the Pallinghurst offer and/or the necessary majority to pass the Pallinghurst Ordinary Resolution at the Pallinghurst General Meeting. Accordingly, Fosun Gold is pleased to announce its intention to make the Fosun Offer and to provide Gemfields shareholders and the holders of Pallinghurst shares with the opportunity to consider an alternative to the Pallinghurst offer that offers superior, immediate all cash value and is supported by the Independent Committee."
Commenting on the Fosun offer, Fosun's Executive Director and Chief Executive Officer Wang Qunbin said: "Fosun is a long-term value investor. We have been persistently looking for investment opportunities which can combine global resources with China's growth momentum and further develop industries related to health, happiness and wealth. We are attracted by Gemfields' professional management team and Gemfields' long-term business potential, in particular in the China market."