Gemfields: Pallinghurst Resources Offer Significantly Undervalues Company

(IDEX Online) – An independent committee established by gemstones miner Gemfields to consider the terms of an unsolicited offer last month from its main shareholder, Pallinghurst, to buy out the rest of the shares that it does not own has been rejected.

The members of the independent committee are Graham Mascall, Clive Newall, Finn Behnken, Ian Harebottle and Janet Boyce, each of whom the board of the company considers to be free from conflicts of interest in respect of the unsolicited offer.

"The independent committee, having received feedback from independent shareholders, has considered the unsolicited offer with its advisers and has unanimously concluded that the terms significantly undervalue the company, its unique asset base and its leading position in the colored gemstone sector," the firm said.

The chairman of the independent committee, Graham Mascall, 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."

The independent committee continues to strongly advise its shareholders to take no action at this time. Further announcements will be made as appropriate, the company added.