Mourant Ozannes advises JSE and BSX listed Pallinghurst Resources Limited on £215M hostile takeover

Mourant Ozannes has advised long-standing client, JSE and BSX listed Pallinghurst Resources Limited, on its acquisition of AIM listed Gemfields plc by way of a hostile contractual takeover.

Pallinghurst is a global natural resources company with a particular emphasis on colored gemstones, platinum group metals and steel making materials and already held a 47% majority stake in Gemfields, a gemstone producing company headquartered in London. Jewellery retailer, Fabergé, is wholly owned by Gemfields.

Under the terms of the takeover bid, Pallinghurst acquired the remaining 53% by offering Gemfields shareholders 1.91 Pallinghurst share per Gemfields share, valuing Gemfields at £215M.

The transaction became contested when Chinese-based Fosun Gold Limited launched a rival cash bid offering a premium to the offer made by Pallinghurst. However, the rival offer from Fosun Gold lapsed and Pallinghurst's takeover bid went unconditional following overwhelming shareholder approval of the transaction on 26 June 2017.

Mourant Ozannes Partner John Rochester led the team advising Pallinghurst, assisted by Counsel Alex Davies and Associate Alana Nisbet. Pallinghurst is also advised by White & Case LLP in London, who project-led the transaction, and ENSafrica in Johannesburg.

John said: "This transaction had a number of challenging aspects to it due primarily to the rival bid from Fosun and the range of jurisdictions in which Pallinghurst operates. That said, our team in Guernsey has built a strong reputation for cross-jurisdictional mergers and acquisitions transactions and, having acted for Pallinghurst since incorporation, we are proud to have worked alongside the board on this transaction which will unlock significant long-term value for shareholders."

Pallinghurst has de-listed Gemfields from the LSE and will operate the business as part of the newly formed consolidated group, enabling Gemfields to perform to its full potential and materially improve trading liquidity. Pallinghurst's investment in Gemfields represents a core component of Pallinghurst's value proposition to its shareholders.