The Independent Committee of the Board of Gemfields plc reiterated its advice to shareholders to take no action with regard to the unsolicited offer from Pallinghurst Resources Limited, even as the latter declared that the lowered acceptance condition (from 75% to 60%) has almost ensured it will succeed in its bid.

The Committee’s statement was in response to an earlier announcement by Pallinghurst that following discussions with the official Takeover Panel, it had agreed to lower the acceptance condition from 75% to 60% as contemplated under the Offer Document. Pallinghurst said that, in addition to the 47.09% of shares owned by it, irrevocable undertakings in respect of the acceptance of the offer had been received from others holding approximately 14.16%, totalling over 60%.

The Offer will thus be final if it receives support with 50% of votes cast at the Pallinghurst General Meeting to be held on June 26.

However, Gemfields’ Independent Committee pointed out “that (given the terms of the undertakings) there is the possibility that Pallinghurst will not receive the necessary majority to pass the ordinary resolution”. It added even otherwise it would be difficult for Pallinghurst to independently delist Gemfields from AIM, which would appear to be at odds with the original rationale for the Offer.

Further, the Committee reiterated its belief that the Offer significantly undervalues the Company, and that, if completed, would materially dilute Gemfields shareholders with inferior assets.

It said it continues to believe that the 45 pence per share cash offer announced by Fosun Gold is “a relatively more attractive outcome for shareholders” and recommended that Gemfields shareholders take no action in relation to the Offer.