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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
NR
-
Why CEOs deserve a pay riseOpinion The CEOs of big companies often come under fire for being grossly overpaid. But the truth, as per some economists, is the opposite. Do they merit a pay rise?
-
Europe prepares to stand alone as Trump turns on UkraineSupport for old military alliances is wavering in the US under Donald Trump. Europe’s leaders are rushing to fill the void. Simon Wilson reports
