21st Oct 2008 07:00
TENDER OFFER
Not for release, publication or distribution in or into or from Australia, Canada, Japan, or the United States or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction (each a "Restricted Jurisdiction").
21 October 2008
Gemfields Resources PLC ("Gemfields") announces a Tender Offer to purchase up to 30,754,970 TanzaniteOne Limited ("T1") common shares at 42.75 pence per share.
Introduction
On 12 September 2008, Gemfields announced a proposed offer of 45 pence for each T1 Share. The proposed offer would have entitled T1 Shareholders to elect to receive as consideration either, or a combination of, cash or 1.4 Gemfields Shares for each T1 Share. The proposed offer was to be reduced pro rata should T1 pay any dividend or make any other payment to T1 Shareholders prior to completion.
On 22 September 2008, T1 declared an interim dividend of US 4 cents per share (2.25 pence). As a result, the proposed offer of 45 pence has been reduced pro rata to 42.75 pence for each T1 Share.
Gemfields hereby announces its firm offer to acquire by a "first-come, first-served" tender offer, on the terms and subject to the conditions set out in the Tender Offer Document and in the Tender Form, up to 30,754,970 T1 Shares. The offer is conditional upon Gemfields obtaining acceptances representing such number of T1 Shares as represents 50.1 per cent. of the issued and to be issued share capital of T1 (on a fully diluted basis) when aggregated with the T1 Shares already held by Gemfields and its affiliates ("the Tender Amount") as follows:
Consideration for T1 Shares tendered in connection with the Tender Offer will be in cash only. No share alternative is available.
Furthermore, the Board of Gemfields confirms that it does not intend to increase the level of the Tender Offer and that the Tender Offer will be closed at the earlier of: (i) such time and date on which Computershare Investor Services PLC ("Computershare") receives valid Tenders in respect of 30,754,970 T1 Shares ("the Early Closing Date"); and (ii) 1.00 p.m. on 11 November 2008 ("the Final Closing Date"). Tenders received after the earlier of the Early and Final Closing Dates will only be accepted at Gemfields' absolute discretion.
At the date of this document Gemfields holds 11,668,330 T1 Shares. Pallinghurst Resources (Guernsey) Limited ("Pallinghurst"), a related party of Gemfields, holds a further 2,100,000 T1 Shares. Together, these T1 Shares represent approximately 18.5 per cent. of the issued share capital of T1 on 20 October 2008.
Gemfields has also received a conditional irrevocable undertaking in respect of approximately 14 million T1 Shares to accept any offer by Gemfields at 42.75 pence per T1 Share, representing approximately 18.8 per cent. of the issued share capital of T1 on 20 October 2008 ("Irrevocable Undertaking").
If the Tender Offer is accepted in full and Gemfields acquires the T1 Shares under the Irrevocable Undertaking Gemfields will, together with the T1 Shares held by Pallinghurst and the T1 Shares already held by Gemfields, be interested in 42,423,300 T1 Shares which would represent approximately 57 per cent. of the issued share capital of T1 on 20 October 2008.
T1 Share price
The tender price of 42.75 pence per T1 Share represents a premium of 53 per cent. over the middle-market quotation of 28 pence at the close of business on 20 October 2008, being the latest practicable date prior to the posting of the Tender Offer.
The tender price of 42.75 pence per T1 Share represents a premium of 68 per cent. over the middle-market quotation of 25.5 pence at the close of business on 29 August 2008, being the last dealing day before Gemfields began its acquisition of T1 Shares.
The tender price of 42.75 pence per T1 Share represents a premium of 49 per cent. over the 30 day volume weighted average price to 29 August 2008 of 28.7 pence per T1 Share.
Terms of the Tender Offer
The Tender Offer is subject to the following terms:
(l) In respect of T1 Shares held in uncertificated form, all Tenders must be made in accordance with the instructions set out in the Tender Offer Document. A Tender of uncertificated shares will only be valid when the procedure set out in the Tender Offer Document is complied with, save where this condition is expressly waived by Gemfields in its sole discretion.
(m) The Tender Offer and all Tenders will be governed by and construed in accordance with English law and delivery of a Tender Form or receipt of the TTE instruction will constitute submission to the jurisdiction of the English courts.
(n) No person outside the UK receiving a copy of the Tender Offer Document or any Tender Form may treat the same as constituting an invitation or offer to him unless the Tender Offer is lawfully made in the relevant territory. It is the responsibility of any such person to satisfy himself as to full observance of the laws of that territory.
(o) All documents and remittances sent by or to T1 Shareholders will be sent at the risk of the person entitled to them. If the Tender Offer does not become or is not declared unconditional or otherwise lapses, Tender Forms, share certificates and other documents of title will be returned by post not later than ten Business Days after the date of such lapse, or, in the case of T1 Shares held in uncertificated form, the Escrow Agent will provide instructions to Euroclear to transfer all T1 Shares held in escrow balance by TFE instruction to the original available balances to which those T1 Shares relate.
(p) If part only of a holding of T1 Shares is successfully tendered pursuant to the Tender Offer, the relevant T1 Shareholder will be entitled to the following: (a) if T1 Shares are held in certificated form - a certificate in respect of the unsold T1 Shares; or (b) if T1 Shares are held in uncertificated form - the transfer by the Escrow Agent by TFE instruction to the original available balances of those unsold T1 Shares.
(q) Further copies of the Tender Form may be obtained on request from Computershare Investor Services PLC, Corporate Actions Projects, Bristol, BS99 6AH.
(r) All decisions as to the number of T1 Shares tendered and the validity, eligibility (including the time and date of receipt), priority and acceptance for payment of any Tender of T1 Shares will be made by Gemfields in its sole discretion, which decision shall be final and binding on all of the parties (except as otherwise required under applicable law). Gemfields reserves the absolute right to reject any or all Tenders it determines not to be in proper form or the acceptance or payment for which may, in the opinion of Gemfields, be unlawful. No Tender of T1 Shares will be deemed to be validly made until all defects or irregularities have been cured or waived. In the event of a waiver, the consideration under the Tender Offer will not be dispatched until after the Tender Form is complete in all respects and the share certificates and/or other document(s) of title satisfactory to Gemfields have been received or (as the case may be) the relevant TTE instruction has settled. Gemfields reserves the absolute right to waive any of the terms of the Tender Offer and any defect or irregularity in the Tender of any particular T1 Shares or any particular T1 Shareholder. None of Gemfields, Computershare or any other person is or will be obliged to give notice of any defects or irregularities in Tenders, and none of them will incur any liability for failure to give any such notice.
(s) The failure of any person to receive a copy of the Tender Offer Document or the Tender Form shall not invalidate any aspect of the Tender Offer.
(t) Any accidental omission to provide or any delay or non-receipt of the Tender Offer Document or the Tender Form by any person entitled to receive the same shall not invalidate any aspect of the Tender Offer including any priority attributed to a Tender.
The Tender procedure for acceptance of the Tender Offer is set out in the Tender Offer Document and in the accompanying Tender Form. The Tender Offer is made on a “first-come, first-served” basis and is therefore time dependent. It is important that T1 Shareholders read the Tender procedure carefully and, if a T1 Shareholder decides to accept the Tender Offer, that such T1 Shareholder act immediately.
Code on Takeovers and Mergers
Gemfields has been advised that the City Code on Takeovers and Mergers does not apply to the Tender Offer or any formal offer for the share capital of T1.
Financing of the Tender Offer
The Tender Offer will be funded by a placing of up to 47,923,276 new Gemfields Shares of 1 pence each in the capital of Gemfields ("Gemfields Shares") at a price of 29 pence per share to Rox Limited ("Rox"), a related party of Gemfields, pursuant to a placing agreement between Gemfields and Rox dated 21 October 2008 ("Tender Offer Placing"). The Tender Offer Placing will raise cash proceeds of up to £13,147,750 representing the maximum cash sum required to fund the Tender Offer and up to £750,000 in respect of costs and expenses relating to the Tender Offer.
The new Gemfields Shares will rank pari passu in all respects with the existing Gemfields Shares. Application will be made for the new Gemfields Shares to be admitted to trading on AIM.
Assuming the maximum number of new Gemfields Shares is placed pursuant to the Tender Offer Placing, following admission of the new Gemfields Shares Rox will, when aggregated with the Gemfields Shares to be issued to Rox pursuant to the Stakebuilding Placing (referred to below), have a beneficial interest in 245,726,872 Gemfields Shares being 66.1 per cent of the total issued ordinary share capital of Gemfields.
Assuming the maximum number of new Gemfields Shares is placed pursuant to the Tender Offer Placing, upon admission the total number of Gemfields Shares, each of which are voting shares, in issue will, when aggregated with the Gemfields Shares to be issued to Rox pursuant to the Stakebuilding Placing, be 372,038,159.
Investec is satisfied that sufficient resources are available to Gemfields to satisfy, in full, the cash consideration payable pursuant to the Tender Offer.
Funding of T1 Stakebuilding by Gemfields
Gemfields has today placed 14,712,143 new Gemfields Shares at a price of 29 pence per share to Rox, a related party of Gemfields, raising cash proceeds of £4,266,521.47 ("Stakebuilding Placing"). The proceeds will be used to finance the purchase of 11,668,330 T1 Shares (including costs and expenses incurred in relation to the same) by Gemfields as part of its stakebuilding exercise in T1 in September 2008. Of the 11,668,330 T1 Shares, Gemfields acquired 7,500,000 T1 Shares at 30 pence per share on 1 September 2008, 500,000 T1 Shares at 37 pence per share on 2 September 2008 and the balance at 45 pence per share between 11 and 30 September 2008 (in each case excluding stamp duty and other costs).
The new Gemfields Shares, the subject of the Stakebulding Placing, will rank pari passu in all respects with the existing Gemfields Shares. Application will be made for the 14,712,143 new Gemfields Shares to be admitted to trading on AIM and it is expected that trading will commence at 8:00 am on 27 October 2008.
Following admission of the 14,712,143 new Gemfields Shares, Rox will have a beneficial interest in 197,803,596 Gemfields Shares being 61.0 per cent. of the total issued ordinary share capital of Gemfields and the total number of Gemfields Shares, each of which are voting shares, in issue will be 324,114,883.
Related Party Transactions: Fair and Reasonable
As Rox owns 59.2 per cent. of Gemfields' total issued ordinary share capital at the date of this announcement and is subscribing for all of the new Gemfields Shares pursuant to the Tender Offer Placing and the Stakebuilding Placing (together the "Placing"), the Placing falls within the definition of a related party transaction under Rule 13 of the AIM Rules for companies. As Pallinghurst owns 49.1 per cent. of the issued share capital of Rox Conduit which in turn owns 87.2 per cent. of the issued share capital of Rox, any acquisition of the T1 Shares held by Pallinghurst pursuant to the Tender Offer will also fall within the definition of a related party transaction under Rule 13 of the AIM Rules for companies. The Directors (with the exception of Rajiv Gupta, Sean Gilbertson and Finn Behnken who are also directors of Rox and therefore interested in the above-mentioned transactions) consider, having consulted with its nominated adviser Canaccord Adams Limited ("Canaccord"), that the terms of the transactions are fair and reasonable insofar as its shareholders are concerned.
Overseas Shareholders
(i) The making of the Tender Offer in, or to persons who are citizens or nationals of, or resident in, jurisdictions outside the United Kingdom or custodians, nominees or trustees for citizens, nationals or residents of jurisdictions outside the United Kingdom may be prohibited or affected by the laws of the relevant overseas jurisdiction. T1 Shareholders who are Overseas Shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of any such T1 Shareholder wishing to tender T1 Shares to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection with the Tender, including the obtaining of any governmental, exchange control or other consents which may be required, the compliance with other necessary formalities and the payment of any transfer or other taxes or other requisite payments due in such jurisdiction. Any such T1 Shareholder will be responsible for payment of any such transfer or other taxes or other requisite payments due by whomsoever payable and Gemfields and any person acting on its behalf shall be fully indemnified and held harmless by such T1 Shareholder for any such transfer or other taxes or other requisite payments such person may be required to pay. No steps have been taken to qualify the Tender Offer or to authorise the extending of the Tender Offer or the distribution of the Tender Form in any territory outside the United Kingdom.
(ii) In particular, the Tender Offer is not being made, directly or indirectly, in or into or by use of the mails or by any means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) or interstate or foreign commerce of, or any facility of a national, state or other securities exchange of any Restricted Jurisdiction, and the Tender Offer cannot be accepted by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction.
Accordingly, copies of the Tender Offer Document, the Tender Forms and any related documents are not being and must not be mailed or otherwise distributed or sent in, into or from a Restricted Jurisdiction including to T1 Shareholders with registered addresses in a Restricted Jurisdiction or to persons who are custodians, nominees or trustees holding shares for persons in a Restricted Jurisdiction.
Persons receiving such documents (including, without limitation, custodians, nominees and trustees) should not distribute, send or mail them in, into or from a Restricted Jurisdiction or use such mails or any such means, instrumentality or facility in connection with the Tender Offer, and so doing will render invalid any related purported acceptance of the Tender Offer. Persons wishing to accept the Tender Offer should not use such mails or any such means, instrumentality or facility for any purpose directly or indirectly relating to acceptance of the Tender Offer. Envelopes containing Tender Forms should not be postmarked in a Restricted Jurisdiction or otherwise dispatched from a Restricted Jurisdiction and all accepting T1 Shareholders must provide addresses outside a Restricted Jurisdiction for the remittance of cash or return of Tender Forms.
(iii) If, in connection with making the Tender Offer, notwithstanding the restrictions described above, any person (including, without limitation, custodians, nominees and trustees), whether pursuant to a contractual or legal obligation or otherwise, forwards this document, the Tender Forms or any related documents in, into or from any Restricted Jurisdiction or uses the mails, or any means or instrumentality (including, without limitation, facsimile transmission, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, any Restricted Jurisdiction in connection with such forwarding, such persons should: (i) inform the recipient of such fact; (ii) explain to the recipient that such action may invalidate any purported acceptance by the recipient; and (iii) draw the attention of the recipient to this paragraph.
(iv) The provisions of this paragraph and any other terms of the Tender Offer relating to Overseas Shareholders may be waived, varied or modified as regards specific T1 Shareholders or on a general basis by Gemfields in its absolute discretion but only if Gemfields is satisfied that such waiver, variation or modification will not constitute or give rise to a breach of applicable securities or other law.
(v) The provisions of this paragraph supersede any terms of the Tender Offer inconsistent with this paragraph.
Overseas Shareholders should inform themselves about and observe any applicable legal or regulatory requirements. If you are in any doubt about your position, you should consult your professional adviser in the relevant territory.
South African Shareholders
Without limiting the import or effect of the above section entitled "Overseas Shareholders", T1 Shareholders resident in and/or nationals or citizens of or who have emigrated from South Africa who wish to accept the Tender Offer should be aware that they may be required to comply with all applicable South African exchange control requirements relating to receipt of any consideration for disposing of T1 Shares and should seek advice from a person properly qualified to advise them if they are in any doubt as to what this may involve. Such T1 Shareholders should also consider any special conditions which were imposed on them by the South African exchange control authorities when they acquired their T1 Shares.
Taxation
The disposal of T1 Shares pursuant to the Tender Offer will constitute a disposal of T1 Shares for the purposes of UK taxation on capital gains and may give rise to liability to taxation. Liability to UK taxation on capital gains will depend on the individual circumstances of holders of T1 Shares. Any holder of T1 Shares who is in any doubt as to his own tax position should consult his professional adviser.
Individual T1 Shareholders who are neither resident nor ordinarily resident in the UK will not be subject to UK capital gains tax in respect of gains arising on disposals of their shareholding. However, a T1 Shareholder who has previously been resident or ordinarily resident in the UK may in some cases be subject to UK tax on capital gains in respect of a disposal of T1 Shares in the event that they re-establish residence in the UK.
A T1 Shareholder which is a company not resident in the UK for tax purposes will have no UK liability to tax on capital gains in respect of a disposal of T1 Shares, though may be subject to foreign tax on the capital gain under local law.
Enquiries:
Richard James, CFO Tel: +44 (0)20 7016 9416 Gemfields Resources plc
Gerard Kisbey-Green/Paul Gray/Avital Lobel Tel: +44 (0)20 7597 4000 Investec Bank (UK) Limited
Financial Adviser to Gemfields
Mike Jones/Tarica Mpinga Tel: +44 (0)20 7050 6500
Canaccord Adams Ltd
Nominated Adviser and Joint Broker to Gemfields
Charlie Geller/Ed Portman Tel: +44(0) 20 7429 6666
Conduit PR
Press Enquiries
If you are in any doubt about the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser authorised under the Financial Services and Market Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
This announcement does not constitute, or form any part of, an offer or invitation to purchase any securities or a solicitation or an offer to buy any securities, pursuant to the Tender Offer or otherwise. The Tender Offer is being made solely by the Tender Offer Document and the Tender Form, which contain the full terms and conditions of the Tender Offer, including details of how the Tender Offer may be accepted.
The availability of the Tender Offer to T1 Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located. T1 Shareholders who are not resident in the United Kingdom should inform themselves about and observe any applicable legal or regulatory requirements in their jurisdictions. The Tender Offer is not being made, and will not be made, directly or indirectly, in or into, or by use of mail, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce, or by any facilities of a national securities exchange of a Restricted Jurisdiction and the Tender Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within those jurisdictions. Accordingly, copies of this announcement, the Tender Offer Document, the Tender Form and any related offering documents are not being, and must not be, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in, into or from a Restricted Jurisdiction. Custodians, nominees and trustees should observe these restrictions and should not send or distribute copies of this announcement, the Tender Offer Document, the Tender Form and any related offering documents in, into or from any Restricted Jurisdiction.
Investec Bank (UK) Limited, which is authorised and regulated by the Financial Services Authority, is acting exclusively for Gemfields and no one else in connection with the Tender Offer and will not be responsible to anyone other than Gemfields for providing the protections afforded to customers of Investec Bank (UK) Limited nor for giving advice in relation to the Tender Offer or any other matter referred to in this announcement.
Investec Bank (UK) Limited has approved this announcement for the purposes of Section 21 of the Financial Services and Markets Act 2000.
Definitions
The following definitions apply throughout this announcement unless the context requires otherwise:
All references to legislation in this announcement are to English legislation unless the contrary is indicated.
Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.
Any reference to any provision of any legislation shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.
All references to time in this announcement are to London time.
All references in this document to "pounds Sterling", "pence", "£", or "p" are to the lawful currency of the United Kingdom, references to "US dollars", "$", "US$" or "cents" are to the lawful currency of the United States.
Related Shares:
Gemfields Grou.