Jon Yeomans Pallinghurst set to vote through Gemfields takeover.
25 June 2017 • 10:28pm
South African fund Pallinghurst Resources is set to vote through today a move to take over Aim-listed miner Gemfields.
The Johannesburg-listed company will put the plan to its shareholders at a general meeting in Guernsey this morning, where it expects to count on the backing of 50.3pc of investors who have pledged “irrevocable” support.
Pallinghurst already owns 47pc of Gemfields, one of the world’s biggest miners of coloured gemstones, and the owner of the Faberge jewellery brand.
Last month it tabled a nil-premium, all-share bid for the rest of the company that valued it at £211m, with Gemfields shareholders set to get a stake in the enlarged business. Pallinghurst’s stable also includes platinum and manganese mines in South Africa, although its stake in Gemfields is by far its most valuable asset.
Pallinghurst’s takeover of Gemfields was dubbed “derisory” by the miner’s board and slammed as “brazen” by minority shareholders who felt it undervalued their stake. The spat drew a rival bid from Chinese conglomerate Fosun, owner of Club Med and Wolverhampton Wanderers, which offered £256m in cash. However last week Pallinghurst locked up support from 61.25pc of Gemfields shareholders, ensuring that it would take majority control and effectively killing off the Fosun bid. Gemfields’ board maintains that Pallinghurst may yet fail to pass its plan at its general meeting, warning last week “there is the possibility that Pallinghurst will not receive the necessary majority to pass the ordinary resolution”. However a source close to the company insisted that Pallinghurst’s support was “diamond hard”.
Even if it secures approval from its shareholders, Pallinghurst still needs to woo more Gemfields shareholders to take it over the threshold of 75pc that will allow it to de-list the shares from Aim. Its offer is open until July 4.
The fund, founded by former BHP Billiton boss Brian Gilbertson, has expressed a desire to launch a secondary listing on London’s main market. But a minority investor in Gemfields said: “If Pallinghurst tries to move the quote to London, it will be shunned.”