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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

21 June 2017

Further update regarding the Unsolicited Pallinghurst Offer

The Independent Committee of the Board of Gemfields plc ("Gemfields" or the "Company") notes the announcement issued yesterday by Pallinghurst Resources Limited ("Pallinghurst") in which Pallinghurst declared that they had lowered the acceptance condition of their offer (the "Unsolicited Pallinghurst Offer") from 75% to 60% and that, given that the level of acceptances received and the shares held by Pallinghurst stood, in aggregate, at 61.25% of the existing issued share capital of Gemfields, they had declared their offer to be unconditional as to acceptances.

The Independent Committee would like to make clear to Gemfields shareholders that the Unsolicited Pallinghurst Offer remains conditional on the passing of an ordinary resolution to approve the offer at the Pallinghurst general meeting, to be held at 11:00 a.m. (London time) on 26 June 2017. Despite the irrevocable undertakings that Pallinghurst has received from certain Pallinghurst shareholders to vote in favour of the ordinary resolution to approve the offer, the Independent Committee believes that (given the terms of the undertakings) there is the possibility that Pallinghurst will not receive the necessary majority to pass the ordinary resolution. The Independent Committee would also note that, in the event of the Unsolicited Pallinghurst Offer closing, based on the number of shares held by Pallinghurst and the acceptances that they have received to date, Pallinghurst would not independently be able to delist Gemfields from AIM. The potential inability for Pallinghurst to delist the Company post closing would appear to be at odds with Pallinghurst's rationale for the transaction as outlined in their circular to shareholders dated 2 June 2017.

The Independent Committee would like to reiterate their belief that the Unsolicited Pallinghurst Offer significantly undervalues the Company, and that, if completed, would materially dilute Gemfields shareholders with inferior assets. The Independent Committee continue to believe that the 45 pence per share cash offer announced by Fosun Gold1 on 20 June 2017 (the "Fosun Offer") offers a relatively more attractive outcome for shareholders.

The Independent Committee urge shareholders to take no action at this time in relation to the Unsolicited Pallinghurst Offer and to await further updates from the Independent Committee in due course and the results of the Pallinghurst general meeting on 26 June 2017.

Commenting on the announcement by Pallinghurst, the Chairman of the Independent Committee, Graham Mascall, said: "We are disappointed at the actions taken by Pallinghurst as they seek to prevent shareholders from having the opportunity to accept the certain cash offer from Fosun Gold at a material premium to the derisory Pallinghurst offer. The Independent Committee continue to recommend Gemfields shareholders take no action in relation to the Pallinghurst offer."

*****

1 Fosun Gold Holdings Limited ("Fosun Gold"), a wholly owned subsidiary of Fosun International Limited ("Fosun International"), a company listed on the Hong Kong Stock Exchange with stock code 00656 (collectively with its affiliates and investment funds advised or managed by Fosun International and/or its affiliates as "Fosun").

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 by no later than 12 noon London time the day following this announcement.

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