Gemfields says Pallinghurst offer is 'derisory'

Gemfields said on Wednesday that Pallinghurst's offer for the remaining 52.9% of the group it doesn't already own "significantly undervalues the company, its unique asset base and its leading position in the coloured gemstone sector".

Under the terms of the offer, which was made on 19 May, Gemfields shareholders would be entitled to receive 1.91 new Pallinghurst ordinary shares for each of their shares. The offer values each Gemfields share at 38.5p and the entire issued and to be issued ordinary share capital of Gemfields at around £211.5m.

Graham Mascall, chairman of the committee, said: "The independent committee is unanimous in concluding that the unsolicited offer from Pallinghurst is derisory and clearly undervalues the company. The company has an exceptional management team with a clear strategy to deliver additional shareholder value on a standalone basis from our unique asset base."

"The independent committee believes the unsolicited offer has the potential to dilute Gemfields shareholders with inferior assets that offer exposure to more volatile commodities and with less attractive prospects. The unsolicited offer would appear to be driven by Pallinghurst's proposed restructuring which seeks to preserve the Pallinghurst investment managers' own self-interests at the expense of the independent shareholders of Gemfields."

Gemfields urged its shareholders to take no action at this time, adding that further announcements will be made as appropriate.

At 0912 BST, the shares were down 1.6% to 33.57p.