Cash Offer for Gemfields plc

Released : 20 Jun 2017 01:00:00

RNS Number : 6184I
Fosun Gold Holdings Limited
20 June 2017
 

Offer for Gemfields plc

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Not for release, publication or distribution, in whole or in part, in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction

20 June 2017

CASH OFFER

FOR

GEMFIELDS PLC

By

FOSUN GOLD HOLDINGS LIMITED

Summary

·           Fosun Gold Holdings Limited ("Fosun Gold") is pleased to announce the terms of a cash offer for Gemfields plc ("Gemfields"), to be made by Fosun Gold, a subsidiary of Fosun International Limited, or a subsidiary of Fosun Gold.

·           The Fosun Offer will be 45 pence in cash for each Gemfields Share, valuing Gemfields's existing issued and to be issued share capital at approximately £256 million.

·           The Fosun Offer Price represents:

■             a premium of 18 per cent. to Gemfields's share price of 38.13 pence at the close of business on 18 May 2017, the last business day before the announcement of the Pallinghurst Offer;

■             a premium of 10.8 per cent. to the Gemfields closing share price of 40.625 pence as at 19 June 2017, the last business day before the date of this announcement; and

■             a premium of 18.2 per cent to the current implied share price of 38.08 pence(1) of the Pallinghurst Offer.

·           The Independent Committee of Gemfields, Ian Harebottle (Chief Executive Officer of Gemfields) and Janet Boyce (Chief Financial Officer of Gemfields) have irrevocably undertaken to accept the Fosun Offer (and/or, as applicable, accept proposals under Rule 15 of the Code) in respect of their own shares (representing, in aggregate, approximately 0.08 per cent. of the existing issued ordinary share capital of Gemfields) and share options in respect of 9,345,000 shares (representing approximately 1.61 per cent. of the issued ordinary share capital of Gemfields on a fully diluted basis), absent a higher offer for Gemfields emerging. Further details of the recommendation of the Fosun Offer by the Independent Committee will be set out in an announcement published by Gemfields today.

·           Fosun Gold believes the Fosun Offer provides Gemfields Shareholders with a compelling alternative to the Pallinghurst Offer for a number of reasons, including:

■             it provides an immediate all cash realisation at a significant premium without any on-going exposure to downside risk associated with the all share, nil-premium Pallinghurst Offer;

■             Pallinghurst's shares have declined in value by approximately 59 per cent. since its IPO in 2008 and are now trading at only 0.52 times Pallinghurst's net asset value as at 31 December 2016; and

■             the Fosun Offer has the support of the Independent Committee, unlike the Pallinghurst Offer which is part of the proposed Pallinghurst restructuring which, the Independent Committee have noted, would appear to focus on preserving the Pallinghurst investment managers' own self-interest at the expense of the independent Gemfields Shareholders.

·           Fosun Gold is aware that there is a possibility that the Pallinghurst Offer may become or be declared unconditional as to acceptances and/or unconditional in all respects in the near future, for example, if Pallinghurst waives down its acceptance condition to 60% and the Pallinghurst Ordinary Resolution is passed at the Pallinghurst General Meeting. However, Fosun Gold believes that there is the possibility that Pallinghurst will not receive either sufficient acceptances to achieve the 75 per cent. acceptance level currently required under the terms of the Pallinghurst Offer and/or the necessary majority to pass the Pallinghurst Ordinary Resolution at the Pallinghurst General Meeting. Accordingly, Fosun Gold is pleased to announce its intention to make the Fosun Offer and to provide Gemfields Shareholders and the holders of Pallinghurst shares with the opportunity to consider an alternative to the Pallinghurst Offer that offers superior, immediate all cash value and is supported by the Independent Committee.

·           The cash consideration payable by Fosun Gold under the terms of the Fosun Offer will be funded from existing cash resources, which has been fully confirmed in accordance with the requirements of the Code.

·           Commenting on the Fosun Offer, Mr. Wang Qunbin, Executive Director and Chief Executive Officer of Fosun said:

"Fosun is a long-term value investor. We have been persistently looking for investment opportunities which can combine global resources with China's growth momentum and further develop industries related to health, happiness and wealth.   We are attracted by Gemfields' professional management team and Gemfields' long-term business potential, in particular in the China market."

This summary should be read in conjunction with, and is subject to, the full text of the attached announcement (including its Appendices). The Fosun Offer will be subject to the Conditions and certain further terms set out in Appendix 1 and to the full terms and conditions to be set out in the Offer Document. Appendix 2 contains the sources and bases of certain information contained in this summary and the following announcement. Appendix 3 contains details of the irrevocable undertakings received by Fosun Gold. Appendix 4 contains the definitions of certain terms used in this summary and the following announcement.

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

Maitland

(PR advisers to Fosun Gold)

Neil Bennett / Sundeep Tucker

0207 379 5151

Notes:

(1)  Calculated with reference to the closing price of Pallinghurst on 19 June 2017 of ZAR330.00 and ZAR/GBP as at close of business (London time) on 19 June 2017 of 16.5526

(2)  Fosun Gold Holdings Limited is a wholly owned subsidiary of Fosun International Limited, a company listed on the Hong Kong Stock Exchange with stock code 00656

 

Further information

This announcement is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Fosun Offer or otherwise, nor shall there be any sale, issuance or transfer of securities of Gemfields in any jurisdiction in contravention of applicable law.  The Fosun Offer will be made solely by means of the Offer Document and (in respect of Gemfields Shares held in certificated form) the acceptance forms accompanying the Offer Document, which will, together, contain the full terms and conditions of the Fosun Offer including details of how it may be accepted.

Please be aware that addresses, electronic addresses and certain other information provided by Gemfields Shareholders, persons with information rights and other relevant persons for the receipt of communications from Gemfields may be provided to Fosun Gold during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(e) of the Code.

Hannam & Partners (Advisory) LLP, 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 Fosun 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 Fosun Offer or any other matters referred to in this announcement.

Overseas jurisdictions

The availability of the Fosun Offer to Gemfields Shareholders who are not resident in and citizens of the UK or the United States may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens.  Persons who are not resident in the UK or the United States should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions.  Further details in relation to Overseas Shareholders will be contained in the Offer Document.

The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK or the United States should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Fosun Offer disclaim any responsibility or liability for the violation of such restrictions by any person.  This announcement has been prepared for the purposes of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England.

The Fosun Offer will not be made, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction. Accordingly, copies of this announcement and formal documentation relating to the Acquisition will not be and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws of that jurisdiction.

Notice to US Gemfields Shareholders

The Fosun Offer is being made for the securities of a UK company and is subject to UK disclosure requirements, which are different from those of the United States. The financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

The Fosun Offer will be made in the United States pursuant to the applicable US tender offer rules and otherwise in accordance with the requirements of the Code. Accordingly, the Fosun Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable under US domestic tender offer procedures and law.

The receipt of cash pursuant to the Fosun Offer by a US Gemfields Shareholder will likely be a taxable transaction for US federal income tax purposes and under applicable state and local, as well as foreign and other tax laws. Each holder of Gemfields Shares is urged to consult his or her independent professional advisor immediately regarding the tax consequences of acceptance of the offer.

It may be difficult for US Gemfields Shareholders to enforce their rights and any claim arising out of the US federal securities laws, since Fosun Gold and Gemfields are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US Gemfields Shareholders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Fosun Gold or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Gemfields Shares outside the United States, other than pursuant to the Fosun Offer, before or during the period in which the Fosun Offer remains open for acceptance. Also, in accordance with Rule 14e-5(b) of the US Exchange Act, Hannam & Partners will continue to act as an exempt principal trader in Gemfields Shares on the London Stock Exchange. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com.

Forward looking statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Fosun Offer, and other information published by Fosun Gold and Gemfields contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Fosun Gold and Gemfields about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in this announcement include statements relating to the expected effects of the Fosun Offer on Fosun Gold and Gemfields, the expected timing and scope of the Fosun Offer and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Fosun Gold and Gemfields believe that the expectations reflected in such forward-looking statements are reasonable, Fosun Gold and Gemfields can give no assurance that such expectations will prove to be correct. 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. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include the satisfaction of the Conditions, as well as additional factors, such as 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. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Fosun Gold nor Gemfields, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules and the Disclosure Guidance and Transparency Rules of the FCA), neither Fosun Gold or Gemfields is under any obligation, and Fosun Gold and Gemfields expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

No profit forecasts or quantified benefits statement

No statement in this announcement is intended as a profit forecast, profit estimate or qualified benefits statement and no statement in this announcement should be interpreted to mean that earnings per Gemfields share or Fosun Gold share for the current or future financial years would necessarily match or exceed the respective historical published earning per Gemfields share or Fosun Gold share or to mean that the enlarged group's earnings in the first 12 months following the Fosun Offer, or in any subsequent period, would necessarily match or be greater than those of Fosun Gold or Gemfields for the relevant preceding financial period or any other period.

Dealing disclosure requirements

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 (s), 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 Fosun Gold 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.

Publication on website and hard copies

A copy of this announcement and the documents required to be published by Rule 26 of the Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at www.fosun.com/language/en/news/1.html and Gemfields' website at www.corporate.gemfields.co.uk. For the avoidance of doubt, the contents of those websites are not incorporated into and do not form part of this announcement.

Fosun Gold shareholders and Gemfields Shareholders may request a hard copy of this announcement by contacting Hannam and Partners during business hours on +44 20 7907 8500. If you have received this announcement in electronic form, copies of this announcement and any document or information incorporated by reference into this document will not be provided unless such a request is made. You may also request that all future documents, announcements and information to be sent to you in relation to the Fosun Offer should be in hard copy form or by submitting a request.

Offer for Gemfields plc

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Not for release, publication or distribution, in whole or in part, in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction

20 June 2017

CASH OFFER

FOR

GEMFIELDS PLC

by

FOSUN GOLD HOLDINGS LIMITED

1.         Introduction

The board of directors of Fosun Gold Holdings Limited ("Fosun Gold") announces the terms of a cash offer for Gemfields plc ("Gemfields"), to be made by Fosun Gold (a subsidiary of Fosun International Limited), or a subsidiary of Fosun Gold, to acquire the whole of the issued and to be issued share capital of Gemfields.

2.         The Fosun Offer

The Fosun Offer, which will be subject to the Conditions and further terms set out in Appendix 1 to this announcement and to be set out in the Offer Document, will be made on the following basis:

for each Gemfields
Share

45 pence in cash

 

If, after the date of this announcement, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Gemfields Shares, Fosun Gold reserves the right to reduce the consideration payable under the terms of the Acquisition at such date by an amount up to the amount of such dividend and/or distribution and/or return of capital.

The Fosun Offer values each Gemfields Ordinary Share at 45 pence and Gemfields's existing issued and to be issued share capital at approximately £256 million.

The Fosun Offer Price represents:

·     a premium of 18 per cent. to Gemfields's share price of 38.13 pence at the close of business on 18 May 2017, the last business day before the announcement of the Pallinghurst Offer;

·     a premium of 10.8 per cent. to the Gemfields closing share price of 40.625 pence as at 19 June 2017, the last business day before the date of this announcement; and

·     a premium of 18.2 per cent to the current implied share price of 38.08 pence(1) of the Pallinghurst Offer.

3.         Recommendation

The Independent Committee of Gemfields has considered the Fosun Offer and support it on the basis set out below and have confirmed to Fosun Gold that they are today making an announcement that includes the following:

"The Independent Committee of Gemfields, who have been so advised by J.P. Morgan Cazenove as to the financial terms of the Fosun Offer, consider that the financial terms of the Fosun Offer are not fair and reasonable. In providing its advice, J.P. Morgan Cazenove has taken into account the commercial assessments of the Independent Committee.

Notwithstanding the above, the Independent Committee are of the belief that the certain cash exit on offer from Fosun Gold is materially more attractive than the unsolicited all-share nil-premium offer from Pallinghurst Resources Limited ("Pallinghurst") announced on 19 May 2017 (the "Unsolicited Pallinghurst Offer"), and would note that the Fosun Offer is at a 18.2 per cent. premium to the implied value of the Unsolicited Pallinghurst Offer. The Independent Committee also reiterate their belief that the Unsolicited Pallinghurst Offer would dilute Gemfields shareholders with inferior assets that offer exposure to more volatile commodities and with less attractive prospects.

Pallinghurst has announced that it has secured irrevocable undertakings that require certain Gemfields shareholders to accept the Unsolicited Pallinghurst Offer (notwithstanding that these irrevocable undertakings cease to be binding in certain circumstances including where there is a rival firm offer at a greater than 10 per cent. premium to the Unsolicited Pallingshurst Offer and such offer has not been matched by Pallinghurst within seven days of such offer) which, when taken together with Pallinghurst's current holding in Gemfields, would result in Pallinghurst exceeding their 75% acceptance condition. In this event, the Unsolicited Pallinghurst Offer would become unconditional as to acceptances and, in the event that the offer was to become unconditional in all respects, Pallinghurst have stated that they intend to delist the Company from AIM. Consequently, given the challenges that the Unsolicited Pallinghurst Offer poses to the independent future of the Company, and given the derisory nature of the Unsolicited Pallinghurst Offer, the Independent Committee intend to recommend that shareholders accept the Fosun Offer so as to secure a relatively more attractive outcome for their investment, as the Independent Committee, Ian Harebottle (Chief Executive Officer of Gemfields) and Janet Boyce (Chief Financial Officer of Gemfields) have irrevocably undertaken to do in respect of their own shares (representing approximately 0.08 per cent. of the issued ordinary share capital of Gemfields) and/or, as applicable, share options (representing approximately 1.61 per cent. of the issued ordinary share capital of Gemfields on a fully diluted basis), absent a higher offer for Gemfields emerging."

4.         Background to and reasons for the Fosun 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 support its development as a leading coloured gemstone producer in both global emerald and ruby production and a well-recognised consumer brand. Gemfields has leading producing assets with the Kagem mine in Zambia being the largest single site emerald producer and the Montepuez mine in Mozambique being one of the largest single site ruby producers. 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 recognises the considerable potential inherent within the consumer market globally, but particularly in China, and already has a number of consumer facing businesses within its portfolio of companies 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 the purchasing of jewellery and luxury goods as well as the increasing use of coloured gemstones in 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 the past few years as well as the ever 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 its growth and to help it gain increased access to China, an as yet untapped 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. Fosun is confident that the Gemfields management team can be integrated into its broader global team and to position Gemfields with the requisite scale to fully exploit the anticipated growth in consumer demand and the luxury goods market both within China and globally.

5.         Pallinghurst Offer

On 19 May 2017, Pallinghurst announced an unsolicited, all share, nil‑premium offer for Gemfields at a value per Gemfields Share equal, at the time of announcement, to 38.5 pence per Gemfields Share.  Gemfields announced on 31 May 2017 that the Independent Committee considered that the Pallinghurst Offer was derisory and significantly undervalued Gemfields, its unique asset base and its leading position in the coloured gemstone sector. Pallinghurst holds 47.09 per cent. of the issued share capital of Gemfields. 

The Pallinghurst Offer is conditional upon (among other things):

·     valid acceptances of the Pallinghurst Offer being received in respect of Gemfields Shares which, together with any Gemfields Shares held by the Pallinghurst group, constitute not less than 75 per cent. of the Gemfields Shares in issue (or such lower percentage, provided that such percentage shall not be less than 60 per cent., as Pallinghurst may decide); and

·     the passing at a general meeting of Pallinghurst (the "Pallinghurst General Meeting") of a resolution (the "Pallinghurst Ordinary Resolution") to approve the Pallinghurst Offer in accordance with the Category 1 requirements under the Johannesburg Stock Exchange Listing Requirements. The Pallinghurst General Meeting has been convened for 26 June 2017 and the requisite majority of Pallinghurst shareholders required to pass the Pallinghurst Ordinary Resolution is more than 50 per cent. of the votes cast on the resolution.

Pallinghurst has also disclosed that it has received irrevocable undertakings:

·     to accept the Pallinghurst Offer from Gemfields Shareholders holding approximately 28.18 per cent. of the Gemfields Shares; and

·     to vote in favour of the Pallinghurst Ordinary Resolution from holders of Pallinghurst shares holding approximately 50.3 per cent. of the Pallinghurst shares.

Further details of these irrevocable undertakings are contained in the offer document relating to the Pallinghurst Offer dated 13 June 2017 and copies of the irrevocable undertakings are available on the Pallinghurst website in accordance with Rule 26 of the Code.

Pallinghurst further announced on 16 June 2017 that it had received valid acceptances of the Pallinghurst Offer in respect of approximately 14.16 per cent. of the Gemfields Shares, that these acceptances were pursuant to irrevocable undertakings in respect of the Pallinghurst Offer and that, accordingly, the acceptances received together with the Gemfields Shares already held by the Pallinghurst group represent approximately 61.25 per cent. of the existing issued share capital of Gemfields.

Fosun is aware, given the above, that there is a possibility that the Pallinghurst Offer may become or be declared unconditional as to acceptances and/or unconditional in all respects in the near future, for example if Pallinghurst waives down its acceptance condition to 60% and the Resolution is passed at the Pallinghurst General Meeting.  However, given (i) the Independent Committee' view that the Pallinghurst Offer significantly undervalues Gemfields, (ii) the superior, all cash terms of the Fosun Offer (being at a 18.2 per cent. premium to the value of the Pallinghurst Offer with reference to the closing price of Pallinghurst on 19 June 2017) and (iii) the view of the Independent Committee that the Fosun Offer is at a material premium to the Pallinghurst Offer and would secure a more attractive outcome for Gemfields Shareholders' investment, Fosun is of the view that it is in the best interests of Gemfields and the Gemfields Shareholders to give the Gemfields Shareholders the opportunity to consider the Fosun Offer as an alternative to the Pallinghurst Offer.  Fosun is of the view that Gemfields Shareholders will welcome such an opportunity.

In addition, Fosun believes that there is the possibility that Pallinghurst will not receive either sufficient acceptances to achieve the 75 per cent. acceptance level currently required for the Pallinghurst Offer and/or the necessary majority to pass the Pallinghurst Ordinary Resolution.

Fosun also notes that:

·    the Pallinghurst Offer is an all‑share offer, meaning that an accepting Gemfields Shareholder will exchange its investment in Gemfields for an investment in Pallinghurst, including its other assets, all of which are minority interests, and which Fosun considers to be inferior to Gemfields (in particular its platinum asset investments).  The Fosun Offer, on the other hand, provides an immediate all cash realisation without on‑going exposure to downside risk;

·     Pallinghurst's shares have declined in value by approximately 59 per cent. since its IPO in 2008 and are now trading at only 0.52 times Pallinghurst's net asset value as at 31 December 2016;

·     the Pallinghurst Offer is part of the proposed Pallinghurst restructuring which, the Independent Committee have noted, would appear to focus on preserving the Pallinghurst investment managers' own self‑interest at the expense of the independent Gemfields Shareholders.  In particular, this restructuring involves:

immediate value leakage to the existing Pallinghurst investment management team through the award of share options;

consequent dilution of the other Pallinghurst shareholders' interests (including those Gemfields Shareholders that have accepted the Pallinghurst Offer); and

the existing Pallinghurst investment management team potentially becoming the single largest shareholding block in Pallinghurst; and

·     Gemfields Shareholders accepting the Pallinghurst Offer will exchange their investment in a gemstone company for an investment in a mining investment holding company that holds only minority interests (other than its holdings in Gemfields).

As a result of the above, Fosun is pleased to announce its intention to make the Fosun Offer and to provide Gemfields Shareholders and the holders of Pallinghurst shares with the opportunity to consider an alternative to the Pallinghurst Offer that offers superior, immediate all cash value and which is supported by the Independent Committee. Fosun intends to actively engage with the Gemfields Shareholders and the holders of Pallinghurst shares following this announcement with respect to the merits of the Fosun Offer. Accordingly, Fosun encourages all Gemfields Shareholders and holders of Pallinghurst shares that are independent of Pallinghurst to support the Fosun Offer.

6.         Irrevocable Undertakings

The Independent Committee of Gemfields, Ian Harebottle (Chief Executive Officer of Gemfields) and Janet Boyce (Chief Financial Officer of Gemfields) have irrevocably undertaken to accept the Fosun Offer (and/or, as applicable, accept proposals under Rule 15 of the Code), and if the Fosun Offer is subsequently structured as a scheme of arrangement, to vote in favour of all resolutions to approve the scheme and any related matters at the court meeting and the general meeting,  in respect of their own shares (representing, in aggregate, approximately 0.08 per cent. of the existing issued ordinary share capital of Gemfields) and share options in respect of 9,345,000 shares (representing approximately 1.61 per cent. of the existing issued ordinary share capital of Gemfields on a fully diluted basis), absent a higher offer for Gemfields emerging.

The undertakings from these directors of Gemfields are in respect of their entire holdings of Gemfields Shares and share options in respect of Gemfields Shares.  The undertakings from the directors of Gemfields will cease to be binding if Fosun announces that it does not intend to proceed with the Fosun Offer and no new, revised or replacement offer is announced at the same time,  the Fosun Offer lapses or is withdrawn and no new, revised or replacement offer is announced at the same time, the Offer Document has not been despatched to Gemfields shareholders within 28 days of the date of this announcement (or within such longer period as Fosun Gold and Gemfields, with the consent of the Panel, determine) or in the event that a higher value competing offer for Gemfields is made and Fosun has not, within five business days, announced a revision to the Fosun Offer such that the value of the Fosun Offer is higher than that of the competing offer.

Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.

7.         Information relating to Fosun Gold

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.

8.         Information relating to Gemfields

Gemfields is a public limited company, incorporated in England and Wales, with its registered office situated in the United Kingdom. Gemfields Shares are listed on AIM. Gemfields is a world leading supplier of responsibly sourced coloured gemstones. It delivers a steady supply of high quality, graded rough gemstones through internationally held auctions with an ability to be a price maker and not merely a price taker. Gemfields operates a "mine and market" strategy, targeting the two most profitable channels of the coloured gemstone supply chain. The auctions are held in secure locations with the material separated into homogeneous lots that have either been produced by Gemfields (and are certified accordingly) or obtained by Gemfields from third parties. The world's leading rough gemstone buyers submit sealed bids for individual lots. A sale occurs if the highest bid received exceeds a pre-determined, but undisclosed, reserve price. The auctions have brought a level of professionalism and transparency previously not seen within the coloured gemstone industry.

As there was no industry standard for evaluating rough coloured gemstones, Gemfields established its own rough grading system to assess each gem according to its individual characteristics (size, colour, hue, shape and clarity). This approach has been instrumental in providing buyers with confidence in the consistent quality of the material on offer. Gemfields used this grading system to develop three auction classes, one offering higher quality gemstones, one for the larger volume of lower quality gemstones and the last offering mixed quality gemstones.

Gemfields owns Zambian emerald and amethyst assets, ruby assets in Mozambique and other gemstone interests in Madagascar and Ethiopia.

Gemfields' key assets include ownership of:

·     75% of the Kagem emerald mine;

·     75% of the Montepuez ruby mine;

·     50% of the Kariba amethyst mine; and

·     100% of Fabergé Limited, one of the world's most recognised luxury brand names.

 

For the financial year ended 30 June 2016, Gemfields had total revenues of US$193.1 million (2015: US$171.4 million) and a profit of US$23.5 million (2015: profit after income tax of US$12.3 million). For the six month period ended 31 December 2016, Gemfields had total revenues of US$51 million (2015: US$94 million) and a loss of US$13.6 million (2015: profit of US$8.2 million).

9.         Financing of the Fosun Offer

The cash consideration payable by Fosun Gold under the terms of the Fosun Offer will be funded from existing cash resources.

Hannam & Partners confirms that it is satisfied that resources are available to Fosun Gold to satisfy in full the cash consideration payable under the terms of the Fosun Offer.

10.       Management, employees and locations

Fosun Gold attaches great importance to the skills and experience of the existing management and employees of Gemfields and believes that they are likely to have greater opportunities within Fosun following the Fosun Offer.

In order to achieve the full potential benefits of the proposed acquisition and in the long-term interests of Fosun, a business, operational, remuneration and administrative review will be undertaken following the Fosun Offer. As at the date of this announcement, no decisions have been made by either Fosun Gold or Gemfields in relation to specific actions that may be taken as part of this business, operational, remuneration and administrative review. Prior to any decisions being made, there will need to be detailed discussions held between Fosun Gold, Gemfields and appropriate stakeholders. It is currently expected that Mr. Ian Harebottle, Gemfields' Chief Executive Officer and Mrs. Janet Boyce, Gemfields' Chief Financial Officer will remain with the Fosun Group following the Fosun Offer.

Fosun Gold confirms that the existing contractual and statutory employment rights, including pension rights, of all employees of Gemfields will be fully observed following completion of the Fosun Offer. 

11.       Management co-investment arrangements

Fosun Gold considers the continued commitment and co-investment of the executive team of Gemfields important to the success of Gemfields within Fosun. In order to further align the interests of key executives with those of Gemfields and Fosun Gold, certain Gemfields directors, namely, Mr. Ian Harebottle, Chief Executive Officer and Mrs. Janet Boyce, Chief Financial Officer, intend to co-invest with Fosun Gold, on a 1:99 basis and structured as outlined in the paragraph below, in the company to be established by Fosun Gold for the purposes of implementing the Fosun Offer.

Fosun Gold, Mr. Harebottle and Mrs. Boyce have entered into a letter agreement dated 20 June 2017 which includes certain customary terms and sets out: (a) the terms of the directors' investment in the form of a management co-investment term sheet; and (b) the basis on which the provisions of the management co-investment term sheet will be implemented upon completion of the Fosun Offer. The management co-investment term sheet provides that, immediately prior to completion of the Fosun Offer, Mr. Harebottle and Mrs. Boyce will collectively subscribe for 0.5 per cent. of the ordinary share capital of the company to be established by Fosun Gold for the purposes of implementing the Fosun Offer, with each of Mr. Harebottle and Mrs. Boyce subscribing pro rata to the proportion of its individual investment in the total management investment. Following completion of the Fosun Offer, Mr Harebottle has committed to invest any cash bonus he receives, after tax, by subscribing for further shares at the Fosun Offer Price until Mrs. Boyce and himself collectively hold 1 per cent. of the ordinary share capital of the company to be established by Fosun Gold for the purposes of implementing the Fosun Offer.

As required by Rule 16.2 of the Code, the management co-investment arrangements will be put to a vote of independent shareholders at a general meeting of Gemfields (the "Gemfields General Meeting").

Further detail on the arrangements described above will be set out in the Offer Document.

12.       Gemfields Share Scheme

Participants in the Gemfields Share Scheme will be contacted regarding the effect of the Fosun Offer on their rights and appropriate proposals will be made to such participants in due course.  Details of these proposals will be set out in the Offer Document.

13.       Disclosure of interests in Gemfields relevant securities

Except for the irrevocable undertakings referred to in paragraph 6 above, as at close of business on 20 June 2017 (being the latest practicable date prior to the date of this announcement), neither Fosun Gold, nor any of the directors of Fosun Gold or any member of Fosun, nor, so far as the directors of Fosun Gold are aware, any person acting in concert with Fosun Gold for the purposes of the Fosun Offer had any interest in, right to subscribe for, or had borrowed or lent any Gemfields Shares or securities convertible or exchangeable into Gemfields Shares, nor did any such person have any short position (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery, or any dealing arrangement of the kind referred to in Note 11 of the definition of acting in concert in the Code, in relation to Gemfields Shares or in relation to any securities convertible or exchangeable into Gemfields Shares.

In the interests of secrecy prior to this announcement, Fosun Gold has not made any enquiries in respect of the matters referred to in this paragraph of certain parties who may be deemed by the Panel to be acting in concert with Fosun Gold for the purposes of the Fosun Offer. Enquiries of such parties will be made as soon as practicable following the date of this announcement and any disclosure in respect of such parties will be included in the Offer Document.

14.       Offer-related Arrangements

Fosun Gold and Gemfields have entered into a confidentiality agreement dated 3 February 2017 pursuant to which each of Fosun Gold and Gemfields has undertaken, among other things, to: (a) keep confidential information relating to the Fosun Offer and the other party and not to disclose it to third parties (other than certain permitted parties) unless required by law or regulation; and (b) use the confidential information for the sole purpose of evaluating, negotiating, advising on or implementing the Fosun Offer.

Fosun Gold and Gemfields have entered into a break payment agreement dated 20 June 2017 pursuant to which Gemfields has undertaken to pay to Fosun Gold or to any subsidiary of Fosun (at Fosun's sole election) a sum that is equal to $2m, or such lesser amount as is determined in accordance with the terms of the agreement, by way of compensation, if following the release of this Announcement a competing offer for Gemfields (which will include the Pallinghurst Offer) becomes or is declared wholly unconditional. In addition, Gemfields will provide Fosun Gold with all relevant information and assistance reasonably necessary or requested to identify and/or satisfy any regulatory or competition conditions to the Fosun Offer.

15.       Delisting and compulsory acquisition

If the Fosun Offer becomes or is declared unconditional in all respects, and sufficient acceptances are received, Fosun Gold intends to procure that Gemfields will make an application for the cancellation of trading of the Gemfields Shares on AIM.

It is anticipated that the application for cancellation of the admission to trading of the Gemfields Shares on AIM will take effect no earlier than the date that is 20 business days after Fosun Gold has acquired or agreed to acquire 75 per cent. of the voting rights attaching to the Gemfields Shares.  The cancellation of the listing would significantly reduce the liquidity and marketability of any Gemfields Shares not assented to the Fosun Offer at that time.

If Fosun Gold receives acceptances under the Fosun Offer in respect of, or otherwise acquires, 90 per cent. or more of the Gemfields Shares to which the Fosun Offer relates, Fosun Gold may exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the remaining Gemfields Shares in respect of which the Fosun Offer has not been accepted.

It is also intended that, following the Fosun Offer becoming or being declared wholly unconditional, Gemfields will be re-registered as a private company under the relevant provisions of the Companies Act.

16.       Overseas Shareholders

The availability of the Fosun Offer or the distribution of this announcement to Gemfields Shareholders who are not resident in the United Kingdom or the United States may be affected by the laws of the relevant jurisdiction.  Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.  Gemfields Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This announcement does not constitute an offer for sale for any securities or an offer or an invitation to purchase any securities.  Gemfields Shareholders are advised to read carefully the Offer Document once it has been dispatched.

17.       Documents published on a website

Copies of the following documents will be published on Gemfields's website at www.corporate.gemfields.co.uk and Fosun Gold's website at www.fosun.com/language/en/news/1.html until the end of the Fosun Offer:

·     the irrevocable undertakings referred to in paragraph 6 above;

·     the confidentiality agreement referred to in paragraph 14 above;

·     the break payment agreement referred to in paragraph 14 above; and

·     a copy of this announcement.

18.       General

The Offer Document will be posted to Gemfields Shareholders as soon as practicable.

The Fosun Offer will be subject to the Conditions and certain further terms set out in Appendix 1 and the further terms and conditions set out in the Offer Document when issued. 

Fosun Gold reserves the right, prior to the despatch of the formal offer documentation to Gemfields Shareholders, to substitute one of its wholly-owned subsidiaries for itself as the entity by which the Fosun Offer is made.

Fosun Gold reserves the right to elect, with the consent of the Panel, to implement the acquisition of the Gemfields Shares by way of a scheme of arrangement under Part 26 of the Companies Act. In such event, the scheme of arrangement will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Fosun Offer, subject to appropriate amendments (including to statutory voting requirements) to reflect the change in method of implementing the Fosun Offer.

The bases and sources of certain financial information contained in this announcement are set out in Appendix 2.  Certain terms used in this announcement are defined in Appendix 4.

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

Maitland

(PR advisers to Fosun Gold)

Neil Bennett / Sundeep Tucker

0207 379 5151

Notes:

(1)  Calculated with reference to the closing price of Pallinghurst on 19 June 2017 of ZAR330.00 and ZAR/GBP as at close of business (London time) on 19 June 2017 of 16.5526

(2)  Fosun Gold Holdings Limited is a wholly owned subsidiary of Fosun International Limited, a company listed on the Hong Kong Stock Exchange with stock code 00656

 

Further information

This announcement is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Fosun Offer or otherwise, nor shall there be any sale, issuance or transfer of securities of Gemfields in any jurisdiction in contravention of applicable law.  The Fosun Offer will be made solely by means of the Offer Document and (in respect of Gemfields Shares held in certificated form) the acceptance forms accompanying the Offer Document, which will, together, contain the full terms and conditions of the Fosun Offer including details of how it may be accepted.

Please be aware that addresses, electronic addresses and certain other information provided by Gemfields Shareholders, persons with information rights and other relevant persons for the receipt of communications from Gemfields may be provided to Fosun Gold during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c).

Hannam & Partners (Advisory) LLP, 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 Fosun 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 Fosun Offer or any other matters referred to in this announcement.

Overseas jurisdictions

The availability of the Fosun Offer to Gemfields Shareholders who are not resident in and citizens of the UK or the United States may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens.  Persons who are not resident in the UK or the United States should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions.  Further details in relation to Overseas Shareholders will be contained in the Offer Document.

The release, publication or distribution of this announcement in or into jurisdictions other than the UK or the United States may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK or the United States should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Fosun Offer disclaim any responsibility or liability for the violation of such restrictions by any person.  This announcement has been prepared for the purposes of complying with English law, the AIM Rules, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England.

The Fosun Offer will not be made, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction. Accordingly, copies of this announcement and formal documentation relating to the Acquisition will not be and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws of that jurisdiction.

Notice to US Gemfields Shareholders

The Fosun Offer is being made for the securities of a UK company and is subject to UK disclosure requirements, which are different from those of the United States. The financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

The Fosun Offer will be made in the United States pursuant to the applicable US tender offer rules and otherwise in accordance with the requirements of the Code. Accordingly, the Fosun Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable under US domestic tender offer procedures and law.

The receipt of cash pursuant to the Fosun Offer by a US Gemfields Shareholder may be a taxable transaction for US federal income tax purposes and under applicable state and local, as well as foreign and other tax laws. Each holder of Gemfields Shares is urged to consult his or her independent professional advisor immediately regarding the tax consequences of acceptance of the offer.

It may be difficult for US Gemfields Shareholders to enforce their rights and any claim arising out of the US federal securities laws, since Fosun Gold and Gemfields are located in countries other than the United States and some or all of their officers and directors may be residents of countries other than the United States. US Gemfields Shareholders may not be able to sue a non‑US company or its officers or directors in a non‑US court for violations of the US securities laws. Further, it may be difficult to compel a non‑US company and its affiliates to subject themselves to a US court's judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Fosun Gold or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Gemfields Shares outside the United States, other than pursuant to the Fosun Offer, before or during the period in which the Fosun Offer remains open for acceptance. Also, in accordance with Rule 14e-5(b) of the US Exchange Act, Hannam & Partners will continue to act as an exempt market maker in Gemfields Shares on the London Stock Exchange.  These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com.

Forward looking statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Fosun Offer, and other information published by Fosun Gold and Gemfields contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Fosun Gold and Gemfields about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in this announcement include statements relating to the expected effects of the Fosun Offer on Fosun Gold and Gemfields, the expected timing and scope of the Fosun Offer and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Fosun Gold and Gemfields believe that the expectations reflected in such forward-looking statements are reasonable, Fosun Gold and Gemfields can give no assurance that such expectations will prove to be correct. 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. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include the satisfaction of the Conditions, as well as additional factors, such as 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. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Fosun Gold nor Gemfields, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules and the Disclosure Guidance and Transparency Rules of the FCA), neither Fosun Gold or Gemfields is under any obligation, and Fosun Gold and Gemfields expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

No profit forecasts or quantified benefits statement

No statement in this announcement is intended as a profit forecast, profit estimate or qualified benefits statement and no statement in this announcement should be interpreted to mean that earnings per Gemfields share or Fosun Gold share for the current or future financial years would necessarily match or exceed the respective historical published earning per Gemfields share or Fosun Gold share or to mean that the enlarged group's earnings in the first 12 months following the Fosun Offer, or in any subsequent period, would necessarily match or be greater than those of Fosun Gold or Gemfields for the relevant preceding financial period or any other period.

Dealing disclosure requirements

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 Gemfields company or of any securities exchange Fosun Gold (being any Fosun Gold other than an Fosun Gold 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 Fosun Gold 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 Gemfields company and (ii) any securities exchange Fosun Gold(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 Fosun Gold is first identified. Relevant persons who deal in the relevant securities of the Gemfields company or of a securities exchange Fosun Gold 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 Gemfields company or of any securities exchange Fosun Gold must make a Dealing Disclosure if the person deals in any relevant securities of the Gemfields company or of any securities exchange Fosun Gold. 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 Gemfields company and (ii) any securities exchange Fosun Gold(s), 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 Gemfields company or a securities exchange Fosun Gold, 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 Gemfields company and by any Fosun Gold and Dealing Disclosures must also be made by the Gemfields company, by any Fosun Gold and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the Gemfields and Fosun Gold 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 Fosun Gold 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.

Publication on website and hard copies

A copy of this announcement and the documents required to be published by Rule 26 of the Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at www.fosun.com/language/en/news/1.html and Gemfields' website at www.corporate.gemfields.co.uk. For the avoidance of doubt, the contents of those websites are not incorporated into and do not form part of this announcement.

Fosun Gold shareholders and Gemfields Shareholders may request a hard copy of this announcement by contacting Hannam and Partners during business hours on +44 20 7907 8500. If you have received this announcement in electronic form, copies of this announcement and any document or information incorporated by reference into this document will not be provided unless such a request is made. You may also request that all future documents, announcements and information to be sent to you in relation to the Fosun Offer should be in hard copy form or by submitting a request.

Appendix 1
CONDITIONS AND CERTAIN FURTHER TERMS
OF THE OFFER

A.        Conditions of the Fosun Offer

The Fosun Offer will be subject to the following conditions ("Conditions"):

(a)        valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. (London time) on the first closing date of the Fosun Offer (or such later time(s) and/or date(s) as Fosun Gold may, subject to the rules of the Code, decide) in respect of not less than 90 per cent. (or such lower percentage as Fosun Gold may decide) in nominal value of the Gemfields Shares to which the Fosun Offer relates and that represent not less than 90 per cent. (or such lower percentage as Fosun Gold may decide) of the voting rights carried by the Gemfields Shares to which the Fosun Offer relates, provided that this condition will not be satisfied unless Fosun Gold and/or any of its wholly‑owned subsidiaries shall have acquired or agreed to acquire (whether pursuant to the Fosun Offer or otherwise) Gemfields Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Gemfields including for this purpose (to the extent, if any, required by the Panel) any voting rights attaching to Gemfields Shares that are unconditionally allotted or issued before the Fosun Offer become or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription rights or conversion rights or otherwise. For the purpose of this condition:

(i)         Gemfields Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry upon issue;

(ii)        the expression "Gemfields Shares to which the Fosun Offer relates" shall be construed in accordance with Part 28 of the Companies Act; and

(iii)       valid acceptances shall be deemed to have been received in respect of Gemfields Shares which are treated for the purposes of the Companies Act as having been acquired or contracted to be acquired by Fosun Gold by virtue of acceptances of the Fosun Offer;

(b)        the management co-investment arrangements summarised in paragraph 11 above, and set out in greater detail in the letter agreement dated 20 June 2017 in relation to these arrangements, having been approved at a general meeting of Gemfields Shareholders in accordance with Rule 16.2;

(c)        the Pallinghurst Offer not having become wholly unconditional in accordance with its terms;

(d)        all statutory and/or regulatory obligations in connection with the Fosun Offer or the acquisition by Fosun of any shares in, or control of, Gemfields or any member of the wider Gemfields Group in any applicable jurisdiction, including any change of control requirements, having been complied with;

(e)        no Third Party (as defined below) having intervened and there not continuing to be outstanding any statute, regulation or order of any Third Party in each case which is or is likely to be material in the context of the Wider Fosun Group or Wider Gemfields Group or the Fosun Offer which would or might reasonably be expected to:

(i)            make the Fosun Offer, its implementation or the acquisition or proposed acquisition by Fosun Gold or any member of the Wider Fosun Group of any shares or other securities in, or control or management of, Gemfields or any member of the Wider Gemfields Group void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly materially restrain, prevent, prohibit, restrict or delay the same or impose additional material conditions or obligations with respect to the Fosun Offer or such acquisition, or otherwise materially impede, challenge or interfere with the Fosun Offer or such acquisition, or require material amendment to the terms of the Fosun Offer or the acquisition or proposed acquisition of any Gemfields Shares or the acquisition of control or management of Gemfields or the Wider Gemfields Group by Fosun Gold or any member of Fosun;

(ii)            materially limit or delay, or impose any material limitations on, the ability of any member of the Wider Fosun Group or any member of the Wider Gemfields Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities in, or to exercise voting or management control over, any member of the Wider Gemfields Group or any member of the Wider Fosun Group;

(iii)           require, prevent or materially delay the divestiture or materially alter the terms envisaged for any proposed divestiture by any member of the Wider Fosun Group of any shares or other securities in any member of the Gemfields Group;

(iv)           require, prevent or materially delay the divestiture or materially alter the terms envisaged for any proposed divestiture by any member of the Wider Fosun Group or by any member of the Wider Gemfields Group of all or any portion of their respective businesses, assets or properties or materially limit the ability of any of them to conduct any of their respective businesses or to own or control any of their respective assets or properties or any part thereof;

(v)           except pursuant to Part 28 of the Companies Act, require any member of the Wider Fosun Group or of the Wider Gemfields Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) in any member of either group owned by any third party;

(vi)           materially limit the ability of any member of the Wider Fosun Group or of the Wider Gemfields Group to conduct or integrate or co‑ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Fosun Group or of the Wider Gemfields Group;

(vii)          result in any member of the Wider Gemfields Group or the Wider Fosun Group ceasing to be able to carry on business under any name under which it presently does so; or

(viii)         otherwise materially adversely affect any or all of the business, assets, profits, financial or trading position or prospects of any member of the Wider Gemfields Group or of the Wider Fosun Group,

and all applicable waiting and other time periods during which any Third Party could intervene under the laws of any relevant jurisdiction having expired, lapsed or been terminated;

(f)         without limitation to condition (e) above:

(i)            in so far as the Fosun Offer constitutes, or is deemed to constitute, a concentration with an EU dimension within the scope of Council Regulation‎ (EC) No. 139/2004, a notification having been made under the Regulation and the European Commission indicating or being deemed to have indicated, in terms satisfactory to Fosun Gold, that it does not intend to initiate proceedings under Article 6(1)(c) of the Regulation, or to make a referral to a competent authority in the EEA under Article 9(1) of the Regulation, in either case with respect to the Fosun Offer or any matter arising from the proposed acquisition of Gemfields by Fosun Gold; and

if the Fosun Offer does not constitute, or is deemed not to constitute, a concentration under the Regulation, a filing having been made under the German Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen) and/or under other applicable national merger control rules and the German Federal Cartel Office (FCO) and all other relevant national authorities (1) having either declined jurisdiction over the Fosun Offer, or having explicitly granted clearance unconditionally or subject to conditions, obligations, undertakings or modifications satisfactory to Fosun Gold, or (2) (through the expiry of time periods available for their investigation) are deemed to have granted clearance, provided such clearance (explicit or deemed) is obtained at the first stage of the national authority's review process; and

(ii)            all filings having been made and all or any applicable waiting periods (including any extensions thereof) under the United States Hart Scott Rodino Antitrust Improvements Act of 1976 and the regulations thereunder having expired, lapsed or been terminated as appropriate in each case in respect of the proposed acquisition of Gemfields by Fosun Gold, or any matters arising from that proposed acquisition; and;

(iii)           the Israeli Antitrust Commissioner having cleared the transaction unconditionally or subject to conditions that are satisfactory to Fosun Gold; or the Fosun Offer being deemed to be cleared because the applicable waiting period pursuant to section 20(b) of the Restrictive Trade Practices Law, 5748-1988 has expired; and

(iv)           to the extent that the transaction to be implemented in terms of the Fosun Offer is required to be notified to the Zambian Competition and Consumer Protection Commission (CPPC) in terms of the Zambian Competition and Consumer Protection Act, No. 24 of 2010, an interim decision by the CCPC authorising the transaction, provided that such authorisation shall either be unconditional or, if such authorisation is subject to any conditions, on conditions that are satisfactory to Fosun Gold; and

(v)           all relevant waiting periods (including any extensions thereof) under applicable merger control rules or antitrust, competition or similar laws in any jurisdiction without which completion of the Fosun Offer would be unlawful or otherwise prohibited or restricted having expired, lapsed or been terminated, and all relevant authorities (1) having either declined jurisdiction over the Offer, or having explicitly granted clearance, either unconditionally or subject to such conditions, obligations, undertakings or modifications satisfactory to Fosun Gold, or (2) (through the expiry of time periods available for their investigation) are deemed to have granted clearance, provided such clearance (explicit or deemed) is obtained at the first stage of the authority review process;

(g)        all notifications to, and filings with, Third Parties which are necessary or are reasonably considered appropriate by Fosun Gold having been made, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case in connection with the Fosun Offer or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Gemfields or any other member of the Wider Gemfields Group by any member of the Wider Fosun Group or the carrying on by any member of the Wider Gemfields Group of any material aspect of its business;

(h)        all Authorisations which are necessary or are reasonably considered necessary or appropriate by Fosun Gold in any relevant jurisdiction for or in respect of the Fosun Offer or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Gemfields or any other member of the Wider Gemfields Group by any member of the Wider Fosun Group or the carrying on by any member of the Wider Gemfields Group of its business having been obtained, in terms and in a form reasonably satisfactory to Fosun Gold, from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider Gemfields Group has entered into contractual arrangements in each case where the absence of such Authorisation would have a material adverse effect on the Gemfields Group taken as a whole and all such Authorisations remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same;

(i)         except as Disclosed  there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the Wider Gemfields Group is a party, or by or to which any such member or any of its assets is or are or may be bound, entitled or subject or any circumstance, which, in each case as a consequence of the Fosun Offer or the acquisition or proposed acquisition of any shares or other securities in, or control of, Gemfields or any other member of the Wider Gemfields Group by any member of the Wider Fosun Group or otherwise, could or might reasonably be expected to result in, (in any case to an extent which is or would be material in the context of the Wider Gemfields Group taken as a whole):

(i)            any monies borrowed by or any other indebtedness or liabilities (actual or contingent) of, or any grant available to, any member of the Wider Gemfields Group being or becoming repayable or capable of being declared repayable immediately or prior to its stated maturity date or repayment date or the ability of any member of the Wider Gemfields Group to borrow monies or incur any indebtedness being withdrawn or inhibited or becoming capable of being withdrawn or inhibited;

(ii)            the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Wider Gemfields Group or any such mortgage, charge or other security interest (wherever created, arising or having arisen) becoming enforceable;

(iii)           any such arrangement, agreement, licence, permit, franchise or instrument, or the rights, liabilities, obligations or interests of any member of the Wider Gemfields Group thereunder, being, or becoming capable of being, terminated or adversely modified or affected or any adverse action being taken or any obligation or liability arising thereunder;

(iv)           any asset or interest of any member of the Wider Gemfields Group being or falling to be disposed of or charged or ceasing to be available to any member of the Wider Gemfields Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider Gemfields Group otherwise than in the ordinary course of business;

(v)           any member of the Wider Gemfields Group ceasing to be able to carry on business under any name under which it presently does so;

(vi)           the creation of material liabilities (actual or contingent) by any member of the Wider Gemfields Group;

(vii)          the rights, liabilities, obligations or interests of any member of the Wider Gemfields Group under any such arrangement, agreement, licence, permit, franchise or other instrument or the interests or business of any such member in or with any other person, firm, company or body (or any arrangement or arrangements relating to any such interests or business) being terminated or adversely modified or affected; or

(viii)         the financial or trading position or the prospects or the value of any member of the Wider Gemfields Group being prejudiced or adversely affected,

and no event having occurred which, under any provision of any such arrangement, agreement, licence, permit or other instrument, would be reasonably likely to result in any of the events or circumstances which are referred to in paragraphs (i) to (viii) of this condition (i) in any case to an extent which is or would be material in the context of the Gemfields Group taken as a whole;

(j)         since 30 June 2016 and except as Disclosed no member of the Wider Gemfields Group having:

(i)            issued or agreed to issue, or authorised the issue of, additional shares of any class, or securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or transferred or sold any shares out of treasury, other than as between Gemfields and wholly‑owned subsidiaries of Gemfields;

(ii)            purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital to an extent which (other than in the case of Gemfields) is material in the context of the Gemfields Group taken as a whole;

(iii)           recommended, declared, paid or made any dividend or other distribution whether payable in cash or otherwise or made any bonus issue (other than to Gemfields or a wholly‑owned subsidiary of Gemfields);

(iv)           made or authorised any change in its loan capital;

(v)           merged with, demerged or acquired any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged, charged or created any security interest over any assets or any right, title or interest in any assets (including shares in any undertaking and trade investments) or authorised the same (in each case to an extent which is material in the context of the Gemfields Group taken as a whole);

(vi)           issued or authorised the issue of, or made any change in or to, any debentures or incurred or increased any indebtedness or liability (actual or contingent) which in any case is material in the context of the Gemfields Group taken as a whole;

(vii)          entered into, varied, or authorised any agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which:

(A)       is of a long term, onerous or unusual nature or magnitude or which is reasonably likely to involve an obligation of such nature or magnitude; or

(B)       is reasonably likely to restrict the business of any member of the Wider Gemfields Group; or

(C)       is other than in the ordinary course of business,

and which in any case is material in the context of the Gemfields Group taken as a whole;

(viii)         entered into, implemented, effected or authorised any merger, demerger, reconstruction, amalgamation, scheme, commitment or other transaction or arrangement in respect of itself or another member of the Wider Gemfields Group which in any case is material in the context of the Gemfields Group taken as a whole;

(ix)           entered into or varied the terms of, any contract, agreement or arrangement with any of the directors or senior executives of any member of the Wider Gemfields Group;

(x)           (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings instituted or threatened against it or petition presented or order made for its winding up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction which in any case is material in the context of the Gemfields Group taken as a whole;

(xi)           been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business in any case with a material adverse effect on the Gemfields Group taken as a whole;

(xii)          waived or compromised any claim which is material in the context of the Gemfields Group taken as a whole;

(xiii)         made any alteration to its memorandum or articles of association which is material in the context of the Fosun Offer;

(xiv)         made or agreed or consented to:

(A)       any material change:

(I)            to the terms of the trust deeds constituting the pension scheme(s) established for its directors, employees or their dependants; or

(II)           the contributions payable to any such scheme(s) or to the benefits which accrue or to the pensions which are payable thereunder; or

(III)         the basis on which qualification for, or accrual or entitlement to such benefits or pensions are calculated or determined; or

(IV)         the basis upon which the liabilities (including pensions) or such pension schemes are funded, valued or made

, in each case, which has an effect that is material in the context of the Gemfields Group taken as a whole, or

(B)       any change to the trustees including the appointment of a trust corporation;

(xv)          proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Gemfields Group; or

(xvi)         entered into any agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) or proposed or announced any intention with respect to any of the transactions, matters or events referred to in this condition (j);

(k)        since 30 June 2016 and except as Disclosed:

(i)            there having been no adverse change or deterioration in the business, assets, financial or trading positions or profit or prospects of any member of the Wider Gemfields Group which in any case is material in the context of the Gemfields Group taken as a whole;

(ii)            no contingent or other liability of any member of the Wider Gemfields Group having arisen or become apparent or increased which in any case is material in the context of the Gemfields Group taken as a whole;

(iii)           no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Gemfields Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider Gemfields Group which in any case would be likely to have a material adverse effect in the context of the Gemfields Group taken as a whole;

(iv)           (other than as a result of the Fosun Offer) no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened, announced, implemented, instituted by or against or remaining outstanding against or in respect of any member of the Wider Gemfields Group which in any case might reasonably be expected to have an adverse effect that is material in the context of the Gemfields Group taken as a whole;

(v)           other than with the consent of Fosun Gold, no action having been taken or proposed by any member of the Wider Gemfields Group, or having been approved by Gemfields Shareholders or consented to by the Panel, which falls or would fall within or under Rule 21.1 of the Code or which otherwise is or would be materially inconsistent with the implementation by Fosun Gold of the Fosun Offer on the basis contemplated as at the date of this announcement; and

(vi)           no member of the wider Gemfields Group having conducted its business in breach of any applicable laws and regulations which in any case is material in the context of the Gemfields Group taken as a whole;

(l)         Fosun Gold not having discovered:

(i)            that any financial or business or other information concerning the Wider Gemfields Group disclosed at any time by or on behalf of any member of the Wider Gemfields Group, whether publicly, to any member of the Wider Fosun Group or otherwise, is misleading or contains any misrepresentation of fact or omits to state a fact necessary to make any information contained therein not misleading and which was not subsequently corrected before 20 June 2017 by disclosure either publicly or otherwise to Fosun Gold to an extent which in any case is material in the context of the Gemfields Group taken as a whole;

(ii)            that any member of the Wider Gemfields Group is subject to any liability (actual or contingent) which has not been Disclosed and which in any case is material in the context of the Gemfields Group taken as a whole; or

(iii)           any information which was not Disclosed which affects the import of any information disclosed at any time by or on behalf of any member of the Wider Gemfields Group to an extent which is material in the context of the Gemfields Group taken as a whole;

(m)       Fosun Gold not having discovered other than as Disclosed:

(i)            that any past or present member of the Wider Gemfields Group has not complied with any applicable legislation or regulations of any jurisdiction with regard to the use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to environmental matters or the health and safety of any person, or that there has otherwise been any such use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission (whether or not this constituted a non‑compliance by any person with any legislation or regulations and wherever the same may have taken place) which, in any case, would be likely to give rise to any liability (whether actual or contingent) or cost on the part of any member of the Wider Gemfields Group which in any case is material in the context of the Gemfields Group taken as a whole;

(ii)            that there is, or is likely to be, any liability, whether actual or contingent, to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Wider Gemfields Group or any other property or any controlled waters under any environmental legislation, regulation, notice, circular, order or other lawful requirement of any relevant authority or third party or otherwise which in any case is material in the context of the Gemfields Group taken as a whole; or

(iii)           that circumstances exist whereby a person or class of persons would be likely to have a claim in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the Wider Gemfields Group which is or would be material in the context of the Gemfields Group taken as a whole.

For the purpose of these Conditions:

(a)        "Third Party" means any central bank, government, government department or governmental, quasi‑governmental, supranational, statutory, regulatory, environmental or investigative body, authority (including any national or supranational anti‑trust or merger control authority), court, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction, including, for the avoidance of doubt, the Panel; and

(b)        a Third Party shall be regarded as having "intervened" if it has decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything and "intervene" shall be construed accordingly;

(c)        "Authorisations" means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, provisions and approvals, in each case, of a Third Party.

B.        Waiver and invocation of the Conditions

Fosun Gold reserves the right to waive all or any of the above Conditions, in whole or in part, except Condition A(a) (Acceptance condition), which cannot be waived.

Conditions A(b) to A(m) (inclusive) must be fulfilled, be determined by Fosun Gold to be or remain satisfied or (if capable of waiver) be waived by midnight on the 21st day after the later of the first closing date of the Fosun Offer and the date on which Condition A(a) is fulfilled (or in each case such later date as Fosun Gold may, with the consent of the Panel, decide), failing which the Fosun Offer will lapse.

Fosun Gold shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of Conditions A(b) to A(m) (inclusive) by a date earlier than the latest date specified above for the fulfilment of that Condition, notwithstanding that the other Conditions may at such earlier date have been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any Condition may not be capable of fulfilment.

The Fosun Offer will lapse if the acquisition of Gemfields by Fosun Gold is referred to the Chair of the Competition and Markets Authority for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 before the later of 1.00 p.m. (London time) on the first closing date of the Fosun Offer and the date when the Fosun Offer becomes or is declared unconditional as to acceptances.

The Fosun Offer will lapse if, in so far as the Fosun Offer constitutes, or is deemed to constitute, a concentration with an EU dimension within the scope of Council Regulation‎ (EC) No. 139/2004, the European Commission either initiates proceedings under Article 6(1)(e) of Council Regulation (EC) No. 139/2004 (the "Regulation") or makes a referral to a competent authority in the EEA under Article 9(1) of the Regulation before the later of 1.00 p.m. (London time) on the first closing date of the Fosun Offer and the date when the Fosun Offer becomes or is declared unconditional as to acceptances.

If the Fosun Offer lapses it will cease to be capable of further acceptance.  Gemfields Shareholders who have accepted the Fosun Offer and Fosun Gold shall then cease to be bound by acceptances delivered on or before the date on which the Fosun Offer lapses.

If the Panel requires Fosun Gold to make an offer or offers for Gemfields Shares under the provisions of Rule 9 of the Code, Fosun Gold may make such alterations to the Conditions as are necessary to comply with the provisions of that Rule.

Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

C.        Certain further terms of the Fosun Offer

Gemfields Shares will be acquired by Fosun Gold fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and other third party rights of any nature whatsoever and together with all rights attaching to them as at the date of this announcement or subsequently attaching or accruing to them, including the right to receive and retain, in full, all dividends and other distributions (if any) declared, made, paid or payable, or any other return of capital made, on or after the date of this announcement.

If, on or after the date of this announcement, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Gemfields Shares, Fosun Gold reserves the right (without prejudice to any right of Fosun Gold to invoke Condition A(g)(iii) in Part A of this Appendix 1), to reduce the consideration payable under the terms of the Fosun Offer for the Gemfields Shares by an amount up to the amount of such dividend and/or distribution and/or return of capital, in which case any reference in this announcement or in the Offer Document to the consideration payable under the terms of the Fosun Offer will be deemed to be a reference to the consideration as so reduced.  To the extent that any such dividend and/or distribution and/or other return of capital is declared, made or paid or is payable and it is: (i) transferred pursuant to the Fosun Offer on a basis which entitles Fosun Gold to receive the dividend or distribution and to retain it; or (ii) cancelled, the consideration payable under the terms of the Fosun Offer will not be subject to change in accordance with this paragraph. Any exercise by Fosun Gold of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Fosun Offer.

The Fosun Offer will be subject to, among other things, the Conditions and certain further terms which are set out in this Appendix 1 and those terms which will be set out in the Offer Document and such further terms as may be required to comply with the AIM Rules and the provisions of the Code.

The availability of the Fosun Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements. Further information in relation to Overseas Shareholders will be contained in the Offer Document.

This announcement and any rights and liabilities arising hereunder, the Fosun Offer and any proxies will be governed by English law and be subject to the jurisdiction of the courts of England and Wales. The Fosun Offer will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the FCA.

Appendix 2
Bases and Sources

(a)        The value attributed to the existing issued and to be issued share capital of Gemfields is based upon the 549,816,476 Gemfields Shares in issue on 19 June 2017 and the 31,180,924 Gemfields Shares which are the subject of options granted under the Gemfields Share Scheme.

(b)        For the purposes of the financial comparisons contained in this announcement, no account has been taken of any liability to taxation or the treatment of fractions under the Fosun Offer.

(c)        Unless otherwise stated, the financial information on Fosun Gold is extracted (without material adjustment) from Fosun International Limited's Annual Report and Accounts for the year ended 31 December 2016.

(d)        The financial information on Gemfields is extracted (without material adjustment) from Gemfields's Annual Report and Accounts for the year ended 30 June 2016 and from the announcement of Gemfields's interim results for the six months ended 31 December 2016.

(e)        The market prices of the Gemfields Shares are the closing middle market quotations as derived from the London Stock Exchange Daily Official List as provided by Bloomberg (PQ040), and the market prices of Pallinghurst shares are the closing prices as derived from Bloomberg.

Appendix 3
DETAILS OF IRREVOCABLE UNDERTAKINGS

The following Gemfields directors, who are holders of Gemfields Shares, have given irrevocable undertakings to accept the Fosun Offer:

Name

Number of Gemfields Shares

Percentage of existing issued ordinary share capital of Gemfields

Options in respect of Gemfields Shares

Percentage of issued ordinary share capital of Gemfields on a fully diluted basis (shares and options)

Graham Mascall

150,000

0.03%

1,300,000

0.25%

Ian Harbottle

200,000

0.04%

5,950,000

1.06%

Janet Boyce

-

-

1,195,000

0.21%

Clive Newall

-

-

900,000

0.15%

Finn Behnken

75,000

0.01%

-

0.01%

Under these irrevocable undertakings, the relevant Gemfields directors undertake to accept the Fosun Offer Offer (and/or, as applicable, accept proposals under Rule 15 of the Code)  and, if the Fosun Offer is subsequently structured as a scheme of arrangement, to vote in favour of all resolutions to approve the scheme and any related matters at the court meeting and the general meeting.

The undertakings are in respect of the relevant directors' entire holdings of Gemfields Shares and/or options in respect of Gemfields Shares.  The undertakings will cease to be binding if Fosun announces that it does not intend to proceed with the Fosun Offer and no new, revised or replacement offer is announced at the same time, the Fosun Offer lapses or is withdrawn and no new, revised or replacement offer is announced at the same time, the Offer Document has not been despatched to Gemfields shareholders within 28 days of the date of this announcement (or within such longer period as Fosun Gold and Gemfields, with the consent of the Panel, determine) or in the event that a higher value competing offer for Gemfields is made and Fosun has not, within five business days, announced a revision to the Fosun Offer such that the value of the Fosun Offer is higher than that of the competing offer.



Appendix 4
 Definitions

The following definitions apply throughout this announcement unless the context requires otherwise.

"£", "Sterling", "pence" or "p"

the lawful currency of the UK

"$"

the lawful currency of the US

"AIM"

AIM, a market operated by the London Stock Exchange

"AIM Rules"

the AIM Rules for Companies published by the London Stock Exchange and setting out the rules and responsibilities in relation to companies with a class of securities admitted to AIM

"associate"

has the meaning given in section 988 of the Companies Act

"Code"

the City Code on Takeovers and Mergers

"Companies Act"

the Companies Act 2006, as amended from time to time

"Conditions"

the conditions of the Fosun Offer set out in Appendix 1

"Dealing Disclosure"

an announcement pursuant to Rule 8 of the Code containing details of dealings in relevant securities of a party to an offer

"Disclosed"

information which has been fairly disclosed by or on behalf of Gemfields to Fosun Gold: (i) in the annual report and accounts of the Gemfields Group for the 12 month period to 30 June 2016; (ii) in the half yearly results announcement of the Gemfields Group for the six month period to 31 December 2016; (iii) in this announcement; and (iv) in any other public announcement by, or on behalf of, Gemfields in accordance with the AIM Rules and the Disclosure Guidance and Transparency Rules of the FCA (as applicable) after 31 December 2016 but prior to the date of this announcement;

"FCA"

the Financial Conduct Authority

"Fosun"

Fosun International Limited and its subsidiaries and subsidiary undertakings

"Fosun Gold"

Fosun Gold Holdings Limited, a wholly‑owned subsidiary of Fosun International Limited

"Fosun Offer"

the cash offer to be made by or on behalf of Fosun Gold to acquire the Gemfields Shares on the terms and subject to the conditions set out in the Offer Document, including where the context so requires, any subsequent revision, variation, extension or renewal of such offer

"Fosun Offer Price"

45 pence per Gemfields Share

"Gemfields"

Gemfields plc

"Gemfields General Meeting"

has the meaning given in paragraph 11 of this announcement

"Gemfields Group"

Gemfields and its subsidiary undertakings

"Gemfields Shareholders"

the registered holders of Gemfields Shares from time to time

"Gemfields Share Scheme"

the Gemfields stock option 2010 scheme approved by the Gemfields Shareholders at the 2010 annual general meeting of Gemfields

"Gemfields Shares"

includes:

(i)         the existing unconditionally allotted or issued and fully paid ordinary shares of 1 pence each in the capital of Gemfields; and

(ii)        any further ordinary shares of 1 pence each in the capital of Gemfields which are unconditionally allotted or issued and fully paid before the date on which the Fosun Offer closes or before such earlier date as Fosun Gold (subject to the Code) may determine not being earlier than the date on which the Fosun Offer becomes or is declared unconditional as to acceptances, but excludes any shares held as treasury shares on such date as Fosun Gold may determine before the date on which the Fosun Offer closes (which may be a different date to the date referred to in (ii)).

"Hannam & Partners"

Hannam & Partners (Advisory) LLP

"Independent Committee"

Graham Mascall, Clive Newall and Finn Behnken, each of whom is a director of the Gemfields not having a conflict of interest with regard to the Fosun Offer

"London Stock Exchange"

London Stock Exchange plc

"Offer Document"

the offer document to be sent to (among others) Gemfields Shareholders containing and setting out, among other things, the full terms and conditions of the Fosun Offer

"Overseas Shareholders"

Gemfields Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom and United States

"Pallinghurst"

Pallinghurst Resources Limited

"Pallinghurst General Meeting"

has the meaning given in paragraph 5 of this announcement

"Pallinghurst Offer"

means the offer by Pallinghurst to acquire Gemfields announced on 19 May 2017, the offer document in respect of which was published by Pallinghurst on 13 June 2017

"Pallinghurst Ordinary Resolution"

has the meaning given in paragraph 5 of this announcement

"Panel"

the Panel on Takeovers and Mergers

"Regulatory Information Service"

any information service authorised from time to time by the FCA for the purpose of disseminating regulatory announcements

"Restricted Jurisdiction"

any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Fosun Offer is sent or made available to Gemfields Shareholders in that jurisdiction

"Substantial Interest"

a direct or indirect interest in 20 per cent. or more of the voting equity capital of an undertaking

"treasury shares"

any Gemfields Shares held by Gemfields as treasury shares

"UK" or "United Kingdom"

the United Kingdom of Great Britain and Northern Ireland

"United States of America", "United States" or "US"

the United States of America, its territories and possessions, any state of the United States and the District of Columbia

"US Exchange Act"

the United States Securities Exchange Act of 1934 as amended, and the rules and regulations promulgated thereunder

"Wider Gemfields Group"

Gemfields and the subsidiaries and subsidiary undertakings of Gemfields and associated undertakings (including any joint venture, partnership, firm or company in which any member of the Gemfields Group is interested or any undertaking in which Gemfields and such undertakings (aggregating their interests) have a Substantial Interest

"Wider Fosun Group"

Fosun Gold and the subsidiaries and subsidiary undertakings of Fosun Gold and associated undertakings (including any joint venture, partnership, firm or company in which any member of Fosun is interested or any undertaking in which Fosun Gold and such undertakings (aggregating their interests) have a Substantial Interest

"ZAR"

the lawful currency of South Africa

For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "undertaking", "associated undertaking" have the meanings given by the Companies Act.

References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted by or under any other enactment before or after the date of this announcement. All references to time in this announcement are to London time unless otherwise stated.

 


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The company news service from the London Stock Exchange
 
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