Relief that Pallinghurst may not be buying Gemfields leads to jump in share
Bengaluru — China’s Fosun International joined the race for Fabergé owner Gemfields, with an approach that valued the London-listed company at £225m.
Gemfields, which mines for emeralds and amethysts in Zambia and for crimson and pinkish-red coloured ruby and corundum in Mozambique, has already received a buyout offer from leading shareholder JSE-listed Pallinghurst Resources.
Investors appeared relieved that Pallinghurst may not be buying Gemfields, sending its share up 8% to R3.40 on Wednesday morning.
"Gemfields represents a compelling opportunity to continue to develop a leading gemstone producer with a dominant position in both global emerald and ruby production and a strong consumer brand," Fosun said.
Fosun Gold, part of acquisitive conglomerate Fosun International, said it had proposed buying Gemfields at a price of 40.85 pence per share, a premium of 15.1% to Gemfield’s closing price of 35.5p on Tuesday.
Pallinghurst had offered 38.5p per share to buy the remaining 52.91% it does not already own.
Gemfields had said Pallinghurst’s offer "significantly undervalues" the company. Its shares rose 12% to 40p on Wednesday.
In May, Fosun announced an $887m strategic investment into Russia’s top gold producer Polyus, increasing its exposure to the global natural resources sector.
Hong Kong-listed Fosun is also said to be interested in buying oil and gas assets worth about $1.5bn from Australia’s top energy retailer, Origin.
In February, AIM-listed Gemfields said that India’s move to scrap higher-value banknotes forced the company to delay an emerald auction and would hurt its revenue and core earnings for the full-year ending June.