Gemfields proposes acquisition of luxury jewellery company

Gemfields, a gemstone miner and marketing company, is proposing to acquire the entire issued share capital of luxury jewellery company Fabergé by way of merger in the Cayman Islands, in a bid to create 'a globally recognised coloured gemstone champion'.

By MoneyWeek

published 21 November 2012

in Features

Gemfields, a gemstone miner and marketing company, is proposing to acquire the entire issued share capital of luxury jewellery company Faberg by way of merger in the Cayman Islands, in a bid to create 'a globally recognised coloured gemstone champion'.

Under the deal, the two companies will merge to form a single enlarged company. The consideration will be satisfied by the issue of as many as 214m new ordinary shares, equal to about 39.6% of the enlarged issued share capital. This values Faberg at around $142m (£89m).

Under the deal, Faberg will provide Gemfields with direct control over a high-end luxury goods platform and global brand.

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Ian Harebottle, Chief Executive Officer of Gemfields said: "The proposed acquisition of Faberg further enhances our potential to be recognised as the leading coloured gemstone company. It provides exposure to the two most profitable segments in the gemstones value chain, namely mining and consumer sales. Faberg is a globally recognised brand with a unique heritage, a history of excellence and a commitment to coloured gemstone products, sales and marketing.

"The proposed acquisition is transformational for the company, our team and our shareholders and has the potential to deliver significant value, expanded growth and diversification opportunities to the company and our shareholders."

Faberg's revenue in the year ended March 31st grew 367%. If the deal is completed in the first quarter of 2013 it will have at least $10m in cash and no debt.

Gemfields's shares fell 6.41% to 36.50p by 14:19.