Vancouver-based gem-miner Rockwell Diamonds has urged shareholders not to take any action until the board is ready to respond to an unsolicited offer for the company, announced on Tuesday, by Pala Investments Holdings.

Pala's offer of C$0,36 a share is a premium of about 84.6% over Rockwell's closing price on the TSX on Monday, the investment group said in a statement posted on its website.

Pala already owned 19,9% of Rockwell, and had been trying for months “to convince the management and board of directors of Rockwell to pursue a range of value-enhancing options”, including a friendly offer made to the company's board.

“No action was taken on any of these options, leaving us with no alternative but to take this offer directly to Rockwell shareholders,” said Joseph Belan, MD of Pala Investments, which advises Pala.

However, Rockwell president and CEO John Bristow said on Tuesday that the company was “disappointed” that Pala had gone public with its offer, after the company had told the Jersey, Channel Islands-based group that its board would consider a C$0,40 a share proposal received on August 29, and would respond by the end of this week.

“We are disappointed that Pala has announced this unsolicited, opportunistic offer for Rockwell and we recommend shareholders take no action until shareholders have received further communications from the board of directors of Rockwell.”

Rockwell had hired RBC Capital Markets as financial adviser on the Pala offer and McCarthy Tétrault LLP as legal adviser.

The firm expects to make a recommendation to shareholders within ten business days, Rockwell said.

Rockwell produces high-value diamonds from alluvial mines in South Africa.

Shares in the company leapt 69% on Tuesday, to C$0,33 a share in Toronto.

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