South African Regulator Calls on Pala to Amend Rockwell Bid
October 16, 08
The South African Securities Regulation Panel has called on British investment firm Pala Investment Holdings to amend its aggressive takeover bid, Rockwell Diamonds said in a statement on Thursday.
The Executive Director of the South African Securities Regulation Panel ruled that an offer made by Pala to buy all of Rockwell’s shares for 36 cents a share is “in breach of certain provisions of the securities regulation code on takeovers and mergers and the rules of the securities regulation panel of South Africa,” and ordered the company to amend the offer.
“Pala has sought to circumvent the principles of fair and equal treatment of all security holders reflected in the SRP Code,” John Bristow, president, chief executive and director of Rockwell said in the statement.
“In addition to undervaluing the company and seeking to deprive security holders of the opportunity to share in the company's significant upside potential, Pala seeks to intentionally deprive security holders of the rights afforded to them under the SRP code,” he added.
“Our special committee and Board of Directors reiterate their unanimous recommendation that the offer is inadequate and unfair, and shareholders should reject the offer and not tender their shares."
Pala, which owns a 19.9 percent stake in Rockwell, had offered to buy all of Rockwell’s outstanding shares in an $85.7 million takeover bid. The Toronto-traded company, which has 238.04 million shares, has a market cap of $45.23 million. The company’s Toronto-traded shares closed at 19 cents on Wednesday. Rockwell’s shares were trading at around 30 cents per share at the time of Pala’s aggressive offer.
Rockwell owns four alluvial, or river-bed, diamond projects and properties in
Pala Investments, based in Jersey,