Wolves owner looks to precious gems sector with £224m bid for mining group

Molineux, home to Wolverhampton Wanderers

A subsidiary of Wolverhampton Wanderers’ Chinese owner is looking to make its presence felt in the gemstones sector by tabling a £224m bid for mining group Gemfields.

In doing so, Fosun Gold is looking to snatch Gemfields away from South African private equity group Pallinghurst, which last month tabled its own offer for the business.

Fosun Gold has confirmed the cash offer, which is based on acquiring the entire issued share capital of Gemstones at a price of 40.85p per share.

The price represents a 15.1% premium on the Gemfields closing price of 35.50p on June 13. It is also a 10.1% premium on the offer made by Pallinghurst (37.10p).

In tabling the bid, Fosun said it was of the opinion that the offer provided Gemfields shareholders with “a compelling cash alternative at a significant premium to the Pallinghurst offer”.

It added: “As a holding company rooted in China with a global presence, Fosun has interests in both the natural resources and consumer sectors. Fosun considers that Gemfields represents a compelling opportunity to continue to develop a leading gemstone producer with a dominant position in both global emerald and ruby production and a strong consumer brand.”

Gemfields, which owns the famous Faberge jewellery brand, has leading producing assets with the largest single site emerald producer at the Kagem Mine in Zambia and is also one of the largest single site ruby producers at the Montepuez mine in Mozambique.

“Combined with Gemfields’s downstream and marketing expertise, Fosun considers that, under the right ownership, Gemfields can continue to transform the coloured gemstone market. Fosun is also excited by the exploration and growth upside that Gemfields’s other pipeline assets represent,” it added.

Gemfields had initially told shareholders to take no action on the Pallinghurst offer as it believed the bid undervalued the company.

In addition to the football club – which it acquired last year – Fosun has several other significant investments in the UK, including ownership of nursery brand Silver Cross and an investment in the Thomas Cook travel group.

Fosun said its interest in these companies, as with its interest in Gemfields, was 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.

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