Gemfields Ends Takeover Bid of TanzaniteOne

Colored gemstone producer Gemfields Resources had allowed its offer for shares in TanzaniteOne to lapse Tuesday.

Gemfields chief executive officer Sean Gilbertson said there were definitely other opportunities for Gemfields to pursue, South Africa’s Business Day reports.

Following Gemfields’ end to its hostile takeover bid, TanzaniteOne, the largest miner of Tanzanite, issued a statement saying that its board will be writing to shareholders shortly to introduce “appropriate takeover protection into its bye-laws” that will ensure that any future offer for control of the company “would have to treat all TanzaniteOne shareholders equally.”

“TanzaniteOne has a clear growth strategy, which is targeting an increase in production to over 3.1 million carats of tanzanite by 2011 and gemstone diversification,” Ami Mpungwe, TanzaniteOne chairman, said in the statement. “We have an excellent team in place to deliver on this strategy and to fulfill our ultimate ambition to become the world’s largest producer and supplier of premium colored gemstones.”

In September, Gemfields first proposed an offer for TanzaniteOne valuing the company at approximately $59 million.

The offer was conditional on Gemfields being offered at least 50.1 percent of TanzaniteOne’s issued share capital, Business Day reports. If successful, the newly purchased shares, combined with its existing stake, would have given Gemfields a 52 percent holding.

TanzaniteOne responded in late October by issuing 83.74 million “B” stock shares, representing 50.2 percent of TanzaniteOne’s enlarged share capital. This was to ensure that if any offer were made for TanzaniteOne, it had to be extended to all the issued shares.

Caption: TanzaniteOne mine

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