Gemfields hits out at ‘derisory’ takeover offer

Faberge owner Gemfields today branded the £211 million takeover offer from its majority shareholder “derisory”.

Pallinghurst Resources, a Johannesburg-listed investment fund run by Brian Gilbertson who oversaw the merger of BHP and Billiton, stunned the market earlier this month with plans to buy the other half of the AIM-listed gemstone company.

Along with co-investors, who include the South African owner of Poundland, Christo Wiese, Pallinghurst controls 73% of Gemfields.

There was no premium on offer, which has sparked outrage among small investors and chairman Graham Mascall said: “The unsolicited offer from Pallinghurst is derisory and clearly undervalues the company.”

He added that merging with Pallinghurst’s other mining investments could “dilute Gemfields shareholders with inferior assets that offer exposure to more volatile commodities and with less attractive prospects”.

Pallinghurst sold the Kagem emerald mine in Zambia to Gemfields in 2008 in return for a stake in the business.