Faberge owner reluctantly backs 'unfair' takeover bid from Chinese company Fosun
Faberge owner Gemfields has given its reluctant backing to a £256 million takeover offer from Chinese conglomerate Fosun despite branding the bid "not fair".
The precious stones miner said it was encouraging its minority shareholders to accept the Fosun offer in the face of a "derisory" takeover bid from its largest shareholder, Pallinghurst Resources.
Gemfields said it considers the terms of the Fosun offer to be "not fair and reasonable".
But it added that "the certain cash exit" on offer from Fosun is "materially more attractive" than the unsolicited bid from Pallinghurst.
Gemfield's shares lifted 5%.
Pallinghurst tabled a £211 million offer for Gemfields last month as it looked to acquire the 53% of the company it does not own.
But AIM-listed Gemfields dismissed the proposed tie-up after an independent committee concluded that it "significantly undervalued" the firm, its "unique asset base" and its "leading position in the coloured gemstone sector".
Fosun Gold, which is part of the Fosun International conglomerate, has waded in with a rival bid worth 45p a share, having earlier made a 40.85p a share proposal.
Its offer comes at an 18% premium to Gemfields's shares before the Pallinghurst offer was announced.
Gemfields said: "G iven the challenges that the unsolicited Pallinghurst offer poses to the independent future of the company, and given the derisory nature of the unsolicited Pallinghurst offer, the independent committee intend to recommend that shareholders accept the Fosun offer so as to secure a relatively more attractive outcome for their investment."
Gemfields mines for emeralds and amethysts in Zambia and ruby and corundum in Mozambique.
It snapped up Faberge - renowned for making lavish Easter eggs for Russia's royal family - from Pallinghurst for £89 million in January 2013.