Gemfields’ shares fell over 2% after its largest investor Pallinghurst lowered the minimum number of acceptances from the company’s shareholders on its takeover offer.
South Africa-listed Pallinghurst requires just 60% of Gemfields’ shareholders to back the deal, which it claims it has already received. However, China’s Fosun Gold — which has offered an 18% premium competing bid — disagrees.
Gemfields is 47% owned by Pallinghurst. Pallinghurst would also need the backing of its own investors on June 26 to press ahead with the offer, which is now unconditional.
Gemfields said that its independent committee considered that the terms of Fosun’s offer were unreasonable. However, it recommended its shareholders accept it, as Pallinghurst’s bid was more unfavourable.
The precious stones producer is the world’s biggest coloured gems producer, accounting for roughly a third of the world’s emeralds and rubies from three African mines.
Last week, the company broke a record by achieving the largest revenue from its auction of rough rubies.