China's Fosun International has increased its offer for Fabergé owner Gemfields to £256m ($324m), turning up the heat in a bid-battle with the largest shareholder of the London-listed company.
Pallinghurst's all-share bid now works out at around 38.1p, which Gemfields has once again labelled as "unsolicited" and "derisory" today.
Pallinghurst's offer for Gemfields attracted the criticism of an independent committee established by Gemfields which said it undervalued the company and exchanged liquid shares in a UK-listed company for an illiquid counter on Johannesburg.
Fosun - led by billionaire Guo Guanchang - originally proposed a 40.85p a share bid when it approached Gemfields last week, but has now lodged a firm cash offer of 45p which values the company at £256mln.
Fosun Gold is part of Hong Kong-listed Fosun International, which has primary operations in pharmaceuticals, petroleum and minerals, property development and consumer goods and services. It also adds a premium of 18.2 per cent to the current implied price of 38.08p per share offered by a rival bidder.
Although it showed no enthusiasm for either of the offers, Gemfields opted for the more attractive of the two.
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Faberge owner Gemfields has given its reluctant backing to a £256 million takeover offer from Chinese conglomerate Fosun despite branding the bid "not fair".
Importantly, Gemfields said the irrevocable undertakings secured by Pallinghurst "cease to be binding in certain circumstances including where there is a rival offer at a greater than 10% premium" to Pallinghurst's offer, and that Pallinghurst has not revised its own offer within seven days of a rival offer being made. However, the committee believes it is "materially more attractive than the unsolicited all-share, nil-premium offer from Pallinghurst".
Including the 47% of shares Pallinghurst already owns in Gemfields, total acceptances had come in at 61.25% to date.
Gemfields said its independent committee considered the terms of Fosun's offer were neither fair nor reasonable, but that in the light of Pallinghurst's offer it meant to recommend shareholders to accept Fosun's bid.
Gemfields shares closed up 3.4% on Tuesday at 42.0 pence.
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