The merger of Gemfields (LON:GEM) with Fabergé will be “transformational”, according to the heavyweight broker JP Morgan Cazenove.
“[It] will create an opportunity for the combined business to develop the global market for coloured gemstones and to achieve synergistic benefits at various points in the supply chain,” said analyst Alexander Mees in a note to clients.
The comments follow formal approval for the £89mln merger, which was given by Gemfields investors earlier this week.
JPMC has re-instated its 38 pence a share price target, although it calculates a net present value for the combined business of 54 pence.
“The discount is consistent with our previous methodology and is intended to reflect the execution risks of the Fabergé integration and the operational risks inherent in mining,” Mees added.
At 12.50pm the shares were changing hands for 32.9 pence, valuing Gemfields at £107mln.