Gemfields shares slumped on Tuesday as Pallinghurst Resources received overwhelming support from its shareholders to go ahead and buy up the remaining shares in the Faberge owner it doesn't already own.
Faberge owner Gemfields said on Tuesday that it is recommending its shareholders accept a takeover offer by China's Fosun, despite branding the bid "not fair and reasonable" as the other offer from Pallinghurt is "derisory".
AIM-listed Gemfields generated record revenues from its auction of rough ruby extracted from the Montepuez ruby deposit in Mozambique.
Gemfields's board rejected an offer from Pallinghurst Resources even as it announced that it had been approached by another outfit.
Gemfields said on Wednesday that Pallinghurst's offer for the remaining 52.9% of the group it doesn't already own "significantly undervalues the company, its unique asset base and its leading position in the coloured gemstone sector".
Gemfields advised its shareholders not to take any action on Friday after it received an unsolicited offer from its biggest shareholder, Pallinghurst, for the remaining 52.9% of the company it doesn't already own.
Analysts at Macquarie sounded a positive note on Gemfields's stock despite what it said was the short-term issue of lower grade production.
Gemfields issued an operational update for the three months ending 31 March on Friday - the third quarter of the financial year.
Shares in Gemfields are down almost 7% after it reversed to a $16.5m first-half pre-tax loss, from a profit of $21.8m, after its results were impacted by India's demonetisation programme.
Coloured gem stone miner Gemfields' first quarter ruby and corundum production had risen due to increased capacity and efficiency, while emerald production fell.
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AIM listed coloured gem stone miner Gemfields' full year revenues and profits rose as it increased production at its Zambia and Mozambique emerald and ruby mines.
Coloured gemstone miner Gemfields said production from its ruby mine would exceed expectations.
Gemfields has confirmed the finalisation of four debt-financing facilities totalling $65m.
Stocks in London were continuing to move higher come midday on Monday, alongside the largest gain the pound in three months, with investors taking their cue from strong gains in Asia as Brexit polls showed the Remain campaign was in the lead.
Gemfields, a British supplier of responsibly sourced coloured gemstones, reported record total revenues of $44.3m at a recent auction of rough rubies in Singapore as the increasing quality of Mozambique gems attracts growing demand.
Gemfields revealed promising results on Monday from a recent auction of predominantly higher quality rough emerald extracted by Kagem Mining, 75% owned by the firm and 25% by the Government of the Republic of Zambia.
A better-planned spread of income saw revenues and earnings drop significantly at Gemfields in the six months to 31 December, though the company remained confident in making up for it in the latter half of the financial year.
Numbers were up at Gemfields' emeralds and luxury goods businesses in the second quarter of its financial year, but production in its ruby division was down as the company focused on higher-quality stones.