Fosun Gold makes offer for Gemfields

Fosun Gold Holdings has confirmed that the Company has made a cash offer for all of the shares of Gemfields at 45p per share, valuing Gemfields at approximately £256m.

The Fosun Offer Price represents:

- a premium of 18% to Gemfields's share price of 38.13p 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% to the current implied share price of 38.08p of the Pallinghurst Offer.

Other points of note from today's statement include:

- 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

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."

At 1:11pm: (LON:GEM) Gemfields PLC share price was +2.76p at 43.38p