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Pallinghurst shareholders back acquisition of Gemfields

The Kagem emerald mine, in Zambia, is the world’s single largest producer of emeralds and accounts for about 20% of global production. (Image courtesy of Gemfields.)

Gemfields’ (LON:GEM) largest investor Pallinghurst said Monday it has received support from 96% of its shareholders to buy remaining interest in the world’s top coloured gems producer.

Gemfields says Pallinghurst’s offer undervalues the company and its prospects as a leading player in the sector.

The London-listed miner told investors it still believes Pallinghurst’s bid “undervalues Gemfields and its prospects as a leading player in the coloured gemstone sector,” and call shareholders to take no action on the offer, which remains open until July 18.

Gemfields has been at the centre of a bidding war between the South African private equity group and Fosun Gold, a unit of Fosun International.

It all began last month, when Pallinghurst tabled a share and cash offer of 38.5 pence per Gemfields share, and a few days later Fosun countered with 45.0p per share.

Gemfields, which owns the luxury Fabergé brand, produces about a third of the world’s emeralds and rubies from two mines in Zambia and one in Mozambique.

Pallinghurst currently has a 41.7% stake in Gemfields. It also has interests in the platinum and manganese sector in South Africa.