Possible offer for Gemfields plc

Released : 14 Jun 2017 07:02:00

RNS Number : 0342I
Fosun Gold Holdings Limited
14 June 2017
 

For immediate release

 

14 June 2017

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

 

THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

Possible Offer for Gemfields plc
("Gemfields")

by

Fosun Gold Holdings Limited(1)
("
Fosun Gold")

 

Fosun Gold confirms that it has made an initial proposal to the independent committee of the Board of Gemfields regarding a possible cash offer to acquire the entire issued and to be issued ordinary share capital of Gemfields (the "Offer") at a price of 40.85 pence per Gemfields share.

 

Highlights

 

·      The proposed Offer would be to acquire the entire issued and to be issued ordinary share capital of Gemfields at 40.85 pence per share, a 15.1 per cent. premium to the Gemfields closing price of 35.50 pence as at 13 June 2017, and a 10.1 per cent premium to the current implied price per share of the offer by Pallinghurst Resources Limited of 37.10 pence(2) (the "Pallinghurst Offer").

 

·      Fosun is a holding company rooted in China and is principally engaged in three business segments of health, happiness and wealth. Fosun endeavours to build a C2M (Customer to Maker) ecosystem, aspiring to making a major stride towards its vision of "Centered around family, deeply rooted in China, innovating a global happiness ecosystem and enriching the health, happiness and wealth of families around the world".

 

·      It is the opinion of Fosun that the possible Offer would provide Gemfields shareholders with a compelling cash alternative at a significant premium to the Pallinghurst Offer.

 

Rationale for the possible Offer

 

As a holding company rooted in China with a global presence, Fosun has interests in both the natural resources and consumer sectors. Fosun considers that Gemfields represents a compelling opportunity to continue to develop a leading gemstone producer with a dominant position in both global emerald and ruby production and a strong consumer brand. Gemfields has leading producing assets with the largest single site emerald producer at the Kagem Mine in Zambia and also one of the largest single site ruby producers at the Montepuez mine in Mozambique. Combined with Gemfields's downstream and marketing expertise, Fosun considers that, under the right ownership, Gemfields can continue to transform the coloured gemstone market. Fosun is also excited by the exploration and growth upside that Gemfields's other pipeline assets represent.

 

A key element of Fosun's strategy is to leverage Chinese and global consumer growth trends to maximise value for its investors. Fosun sees the consumer market globally, but particularly in China, to have huge potential and has a number of consumer facing businesses that would be complementary to an investment in Gemfields. Similarly, Fosun has noted the increasing size of the precious stones market as consumers in China and other emerging markets increasingly demonstrate their wealth, status and emotional commitment to one another through jewellery and luxury goods as well as the growing use of engagement rings. This trend has been borne out by the steadily rising prices achieved by Gemfields for its emeralds, rubies and sapphires at its auctions over time as well as the increasing sales volumes that have been achieved through its strategy of consistent, high quality production and auctions. Fosun believes it has the financial capability and consumer expertise to allow Gemfields to accelerate and continue that trend as well as to help it access China, a previously underexploited market.

 

Fosun has met with the Gemfields management team and has been extremely impressed with their experience and vision for the company. The improvements that the incumbent management team have been able to achieve since taking control of the business have been consistently demonstrated over a number of years and Fosun is confident that it can integrate them into its broader global team to position Gemfields to have the scale to fully exploit the consumer growth and luxury good trend both in China and globally that both parties expect to continue.

 

Information on Fosun

 

Fosun was founded in 1992 in Shanghai. Fosun International (00656.HK) was listed on the Main Board of the Hong Kong Stock Exchange on 16 July 2007. As at December 31, 2016, Fosun's total assets exceeded RMB480 billion and it is principally engaged in three business segments of health, happiness and wealth. Fosun has been persistently focusing on China's growth momentum and further developing in industries related to health, happiness and wealth. Fosun endeavours to build a C2M (Customer to Maker) ecosystem, aspiring to making a major stride towards its vision of "Centered around family, deeply rooted in China, innovating a global happiness ecosystem and enriching the health, happiness and wealth of families around the world".

 

Fosun has several significant investments in the UK, including ownership of nursery brand Silver Cross and an investment in the Thomas Cook travel group. Fosun's interest in these companies, as with its interest in Gemfields, is driven by its strategy of bridging the gap between the huge Chinese consumer market and quality brands and products from other regions of the world.

 

In May 2017, Fosun announced a US$887 million strategic investment into Polyus Gold, one of the world's largest gold producers, further increasing its exposure to the global natural resources sector.

 

Possible Offer

 

Fosun Gold is currently considering a possible Offer as follows:

 

·      The possible Offer would be made at a price of 40.85 pence in cash for each Gemfields share, representing a premium of approximately 15.1 per cent. to the closing price of 35.50 pence per Gemfields share, and a premium of:

 

-      7.1 per cent. to the undisturbed closing price on 18 May of 38.13 pence; and

 

-      10.1 per cent. to the current implied price per share of 37.10 pence(2) of the Pallinghurst Offer.

 

·      Fosun Gold intends to seek to discuss a recommendation of the possible Offer by the independent committee of the Board of Gemfields.

 

Fosun Gold notes that its proposal does not constitute a firm intention to make an offer under Rule 2.7 of the Code. The announcement of any such firm intention to make an offer by Fosun Gold is subject to the satisfaction of confirmatory due diligence. Fosun Gold reserves the right to waive this pre-condition to the announcement but notes that there can be no certainty that a formal offer will be made, even if the pre-condition is satisfied or waived. 

 

A further announcement will be made when appropriate.

 

Enquiries:

 

Fosun Gold

Edward Sun

Samuel Guan

                             

Hannam & Partners

(Financial adviser to Fosun Gold)

Neil Passmore

Andrew Chubb

Ernest Bell

Telephone: +44 20 7907 8500

 

(1) Fosun Gold Holdings Limited, a wholly owned subsidiary of Fosun International Limited ("Fosun International"), a company listed on the Hong Kong Stock Exchange with stock code 00656 (collectively with its affiliates and investment funds advised or managed by Fosun International and/or its affiliates as "Fosun" or "we" ).

(2) Calculated with reference to the closing price of Pallinghurst on 13 June 2017 of ZAr315.00 and ZAR/GBP as at close of business (London time) on 13 June 2017 of 16.2178.

 

Further information

 

Hannam & Partners (Advisory) LLP ("Hannam & Partners"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority for investment business activities, is acting exclusively as financial adviser to Fosun Gold and no one else in connection with the possible Offer and will not be responsible to anyone other than Fosun Gold for providing the protections afforded to clients of Hannam & Partners, nor for providing advice in relation to the possible Offer or any other matters referred to in this announcement.

 

This announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to acquire or sell or an invitation to sell or subscribe for or purchase any securities or the solicitation of an offer to sell or subscribe for or purchase any securities in any jurisdiction pursuant to the Offer or otherwise nor should any part of it form part of, or be relied on, in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of any company in the Fosun.

 

Overseas shareholders

 

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by, or otherwise subject to, the laws of those jurisdictions, and therefore persons into whose possession this announcement comes should inform themselves about and observe any such laws or regulations. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. It is the responsibility of each such person to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental or other consents which may be required to be observed and the payment of any taxes or fees in such jurisdictions.

 

Forward looking statements

 

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of Gemfields and its subsidiaries ("Gemfields Group") and certain intentions, plans and objectives of Fosun Gold with respect thereto. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning.

 

These statements are based on assumptions and assessments made by Fosun Gold in light of its experience and perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. Fosun Gold does not assume any obligation to update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law, the Financial Conduct Authority or the Panel on Takeovers and Mergers.

 

There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. Nothing in this announcement is intended, or is to be construed, as a profit forecast or a forecast of earnings per share.

 

Publication on website

 

In accordance with Rule 30.4 of the Code, a copy of this announcement will be available at www.fosun.com/language/en/news/1.html by no later than 12 noon on 15 June 2017. 

 

The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

 

Disclosure requirements of the Takeover Code (the "Code")

 

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

 

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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