Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
Emeralds and rubies miner Gemfields (LON:GEM) is encouraging its minority shareholders to accept an improved takeover bid from China’s Fosun International, despite considering it unfair, to avoid being bought-up by its largest shareholder.
The London-listed miner told investors Tuesday that while the terms of Fosun’s proposal are “not fair or reasonable,” the offer from South African private equity group Pallinghurst, Gemfields’ biggest shareholder, is even more “derisory.”
The precious stones miner has recommended shareholders to accept Fosun’s new offer, despite considering it “unfair” and “unreasonable.”
Fosun Gold, a unit of Fosun International, increased Tuesday its offer for Gemfields to 45 pence per share from an earlier proposal of 40.85 pence per share. That’s an 18% premium compared to Gemfields’ share price before it first announced it had received an unsolicited bid.
The sweetened offer trumps Pallinghurst Resources’ rival bid of 38.5 pence to acquire the 53% of the coloured gems producer it does not already own.
Fosun chief executive Wang Qunbin said his company was impressed by Gemfields’ “long-term business potential, in particular in the China market”, adding that its cash offer provides a “compelling alternative” to Pallinghurst’s all-share bid.
Gemfields’ board did not share Qunbin’s enthusiasm, noting that Fosun’s new bid still represents an 18% discount to where the company’s shares traded only six months ago.
It also said it would to pay the Chinese miner a break fee of $2 million by way of compensation if a competing proposal becomes or is declared wholly unconditional.
Shares in the company jumped almost 5% in the first hour of trade in London to 43.50 p and while it lost a few points later, it was still 4.62% higher to 42.50 p by 3:00 PM local time.
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.
Last week, the company broke its own record by achieving the highest revenue from its latest auction of rough rubies.
