News

Update: Tanzanite One slams Gemfields offer

21 October 2008 16:50:00

Tanzanite One has called on investors to reject a 42.75p a share tender offer from Gemfields Resources to buy as many as 30.7m shares in the tanzanite miner.

"The board of TanzaniteOne notes that the Gemfields proposal would allow Gemfields to take control of the company without making an appropriate offer to all shareholders," said the group.

"The board strongly recommends shareholders not to accept the tender offer."

Gemfields proposed a 45p a share bid last month worth £33m, but the tender price reflects the 2.25p interim dividend since announced by Tanzanite.

The offer, which Gemfields said will not be increased, is conditional upon obtaining at least 50.1% acceptances. It is being made on a 'first come first served' basis and is open until 11 November at the latest.

Gemfields currently owns 11.7m Tanzanite shares, with Pallinghurst Resources, a related party, holding another 2.1m. Between them they have an 18.5% stake.

On top of that, the company has received a conditional irrevocable undertaking in respect of approximately 14m shares at 42.75p each, representing about 18.8% of the business.

If the tender offer is accepted in full, Gemfields will own 42.4m shares, or 57% of Tanzanite One.

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