JOHANNESBURG (miningweekly.com) – The South African Securities Regulation Panel (SRP) has ruled against mining investment firm Pala Investment Holdings' offer to acquire the remaining shares of gem-miner Rockwell Diamonds.

The investment firm, which already owns a 19,9% stake Rockwell, in September offered to buy the remaining shares for $0,36 apiece.

However, Rockwell Diamonds CEO John Bristow said in a statement to shareholders on Thursday that the SRP had ruled that the offer was in breach of certain provisions of the Securities Regulation Code on Takeovers and Mergers and the Rules of the SRP of South Africa, collectively called the SRP code.

The SRP has ordered Pala to amend its offer.

"Pala's failure to comply with certain of the requirements of the SRP code is consistent with its opportunistic conduct in making the offer," commented Bristow.

The SRP had ruled that the offer failed to properly consider the rights of option holders and warrant holders and ruled that appropriate offers must be made to the holders of outstanding Rockwell warrants and Rockwell options in instances where the warrants or options have a positive monetary value.

The offer had also failed to comply with the code, as it was subject to several conditions, which depends solely on the subjective judgment of Pala.

The investment firm had to issue a supplementary offer circular in which it had removed the conditions that depended solely on its subjective discretion.

Bristow concluded that Rockwell Diamonds' special committee and the board of directors "reiterate their unanimous recommendation that the offer is inadequate and unfair, and shareholders should reject the offer".

DRC DISPUTE

Meanwhile, the company reported separately that it was seeking formal legal advice with regard to a dispute with one of the owners of the exploration permit at its Kwango river project, in the Democratic Republic of Congo.

One of the 50% shareholders of Midamines, a DRC company with which Rockwell has an agreement, is denying the validity of the deal between the two firms, Rockwell said.

However, while the dispute had "significantly delayed" the company's proposed operations on the site, Rockwell added that the project is "not a material operation of the company".

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