Diamond magnate Laurence Graff has acquired a 4.5% stake in Gem Diamonds this week. Graff said that he has bought shares in the company with a view to long-term investment in the business, which he described as “an excellent company”, and said he does not intend to make a formal offer for the diamond miner.

Gem Diamonds, which recently unveiled the potentially biggest round-cut diamond in history, said it welcomed the acquisition. The company said that the two companies have enjoyed a strong relationship over the past two years since Gem Diamonds acquired a 70% stake in Letšeng Diamonds of which Graff Diamonds International is a major customer.

Gem Diamonds chief executive Clifford Elphick said: “Gem Diamonds looks forward to further developing its relationship with Graff, now as a shareholder as well as a key client, and acknowledges the vote of confidence that this investment in Gem Diamonds represents.”

Graff said he is looking forward to meeting with Gem Diamonds management and hopes to work closely with the business. His company Graff Diamonds International has bought two major diamonds, Lesotho Promise and Letšeng Legacy, from the outfit since its majority takeover of Letšeng Diamonds.

Graff said: “Gem Diamonds is an excellent company that produces some of the finest diamonds in the world today. Our investment in the company reflects our confidence in its fundamental value and in the management’s ability to realise this value for shareholders from its asset base. We are also very much looking forward to talking with the management of Gem Diamonds to explore ways of working together fruitfully.”

Graff’s businesses specialise in retailing luxury diamonds, which its team of more than 300 staff cut and polish in-house. It sells diamond jewellery from 32 Graff stores throughout the world.