VANCOUVER, Sept. 10 /CNW/ - Pala Investments Holdings Limited ("Pala")
today provided facts for shareholders of Rockwell Diamonds Inc. ("Rockwell",
TSX: RDI, JSE: RDI, OTCBB: RDIAF) following Rockwell's news release of
September 9, 2008.
After Rockwell management had several weeks to consider a potential
take-private transaction, Pala wrote to the Board of Directors of Rockwell on
August 29, 2008 with a proposal to acquire 100% of Rockwell's common shares.
The letter outlined a clear path to the completion of a transaction, including
a limited period of due diligence. Since Rockwell was well aware of Pala's
longstanding interest, Rockwell should have required only a short period of
time to evaluate Pala's offer. Rockwell's assertion that its Special Committee
could not meet until September 12, and could not respond until at least
September 15, demonstrates Rockwell's continued resistance to timely
consideration of value-creation initiatives for its shareholders.
"Rockwell should not require more than two weeks to assess its own value,
when consideration of a potential transaction had been under way for over a
month," said Joseph Belan, Managing Director of Pala Investments AG, advisor
to Pala. "Pala's recent proposal to the company of $0.40 per Rockwell share
was conditional on Pala being granted a customary and short period of
exclusivity to complete negotiations. If Rockwell had been interested in
completing a transaction on these terms, Rockwell's shareholders could have
received an additional 11% of value. This delay continues Rockwell
management's track record of destroying shareholder value."
Shareholders should be concerned that it will take Rockwell a further 10
business days to formally respond to Pala's September 9th offer, and the
Company says it will not respond until immediately prior to the expiry of
Pala's due diligence condition on September 24.
"This is yet another example of Rockwell's attempts to frustrate and
delay a valid offer for the Company, and further demonstrates management's
unwillingness to consider opportunities to realize value for shareholders,"
said Mr. Belan.
Pala notes that the "independent" Special Committee, appointed by
Rockwell to evaluate Pala's offer, is chaired by Mark Bristow, the brother of
Dr. John Bristow, CEO of Rockwell. "The appointment of a chairperson who is
clearly not independent in his views is simply a blatant example of poor
corporate governance and the continuing efforts to entrench management at
Rockwell," Mr. Belan said.
Pala Investments Holdings Limited, based in Jersey, Channel Islands, is a
US$1.2 billion multi-strategy investment company with a particular focus on
mining and natural resource companies in both developed and emerging markets.
Pala Investments' exclusive investment advisor, Pala Investments AG, is a
Switzerland-based team with extensive experience within the mining and natural
resource sectors. Pala Investments seeks to assist companies in which they
have long-term shareholdings by providing strategic advice and innovative
Pala, thorough a wholly-owned subsidiary, on September 9, 2008 commenced
an offer to acquire 100% of the common shares of Rockwell. Complete
information about the offer can be obtained by referring to the offer and
take-over bid circular filed with Canadian securities regulators.
For further information:
For further information: John Lute, Lute and Company, (416) 929-5883