Gemfields Grou. Regulatory News (GEM)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

31 May 2017

Further response to the unsolicited firm offer from Pallinghurst Resources Limited ("Pallinghurst")

On 19 May 2017, Pallinghurst announced a nil-premium firm offer to acquire the issued and to be issued share capital of Gemfields plc ("Gemfields" or the "Company") that it did not already own (the "Unsolicited Offer").

Following the announcement, Gemfields formed an Independent Committee to consider the terms of the Unsolicited Offer with its advisers. The Independent Committee comprises Graham Mascall (as Chairman of the Independent Committee), Clive Newall, Finn Behnken, Ian Harebottle and Janet Boyce, each of whom the board of the Company considers to be free from conflicts of interest in respect of the Unsolicited Offer. The members of the Independent Committee will act in accordance with their duties as directors and, in particular, in order to protect the interests of the minority independent shareholders of the Company.

The Independent Committee, having received feedback from independent shareholders, has considered the Unsolicited Offer with its advisers and has unanimously concluded that the terms significantly undervalue the Company, its unique asset base and its leading position in the coloured gemstone sector.

The Chairman of the Independent Committee, Graham Mascall, said: "The Independent Committee is unanimous in concluding that the Unsolicited Offer from Pallinghurst is derisory and clearly undervalues the Company. The Company has an exceptional management team with a clear strategy to deliver additional shareholder value on a standalone basis from our unique asset base."

"The Independent Committee believes the Unsolicited Offer has the potential to dilute Gemfields shareholders with inferior assets that offer exposure to more volatile commodities and with less attractive prospects. The Unsolicited Offer would appear to be driven by Pallinghurst's proposed restructuring which seeks to preserve the Pallinghurst investment managers' own self-interests at the expense of the independent shareholders of Gemfields."

The Independent Committee continues to strongly advise its shareholders to take no action at this time. Further announcements will be made as appropriate.

Unless otherwise stated, terms used in this announcement have the same meanings as given to them in the Response Announcement and the Unsolicited Offer announcement.

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Enquiries

J.P. Morgan Cazenove +44 20 7742 4000

Jamie Riddell / James Robinson

Grant Thornton UK LLP (Nominated Adviser) +44 20 7383 5100

Philip Secrett / Richard Tonthat

BMO Capital Markets Limited +44 20 7236 1010

Jeff Couch / Neil Haycock

Macquarie Capital (Europe) Limited +44 20 3037 2000

Raj Khatri / Nick Stamp

Tavistock (PR Adviser) +44 20 7920 3150

Jos Simson / Emily Fenton

Further information

J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), BMO Capital Markets Limited and Macquarie Capital (Europe) Limited are authorised and regulated in the United Kingdom by the Financial Conduct Authority. J.P. Morgan Cazenove, BMO Capital Markets Limited and Macquarie Capital (Europe) Limited are acting as financial advisers exclusively for Gemfields and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than Gemfields for providing the protections afforded to clients of J.P. Morgan Cazenove, BMO Capital Markets Limited and Macquarie Capital (Europe) Limited or their affiliates, or for providing advice in relation to any matter referred to herein.

Grant Thornton UK LLP is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is acting as nominated adviser for Gemfields and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than Gemfields for providing the protections afforded to clients of Grant Thornton UK LLP or for providing advice in relation to any matter referred to herein.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website

A copy of this announcement will be made available, subject to certain restrictions relating to persons resident in restricted jurisdictions, on Gemfields' website at www.gemfields.co.uk and by no later than 12 noon London time on 1 June 2017.

The content of the websites referred to in this announcement is not incorporated into and does not form part of this announcement.