Randgold surprises with rival Ashanti bid
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By Julie Bain
Randgold Resources, a gold mining minnow, is taking on AngloGold with a proposed counter bid for Ghana's Ashanti Goldfields that tops the offer made by AngloGold last week.
The company's market capitalisation is about R4,45bn compared to AngloGold's R55,69bn, and Randgold has only one goldproducing operation, a 40% stake in the Morila opencast mine in Mali, where AngloGold holds the other 40% stake and manages the mine.
The Randgold offer would be worth about $1,46bn, according to the UK's Independent on Sunday newspaper. This compares with AngloGold's $1,09bn offer.
AngloGold failed to secure its last takeover target when its offers for Normandy Mining in Australia in 2001 were trumped by USbased Newmont Mining.
Randgold, which is listed in London and on the US Nasdaq exchange, said discussions were at an early stage, and "may or may not lead to a formal proposal being made or an agreement being reached".
If AngloGold Africa's largest gold mining company and the world's second-biggest gold producer succeeds in its bid, the combination of Ashanti and AngloGold would be neck-andneck with the world's top producer, Newmont Mining.
Randgold's indicative offer is one Randgold ordinary share or American depository receipt for every two Ashanti ordinary shares.
AngloGold said yesterday, though, that it if an offer was made by Randgold, it did not think Ashanti's shareholders would find it attractive.
"There is a substantial amount of capital required for the recapitalisation of Ashanti's infrastructure and to develop the Obuasi Deep project as well as the technical expertise needed to develop the mine," said AngloGold spokesman Steve Lenahan.
"Against this background we believe the market will find an offer from AngloGold to be more attractive." Lenahan said that AngloGold would make an announcement on Randgold's indicative offer in due course.
AngloGold has the support of both Ashanti and Lonmin, which has a 27,6% stake in Ashanti, for its R1,09bn offer to take over the Ghanaian gold company and needs only to secure the go ahead from the Ghanaian government for its offer.
Last week it was reported that Lonmin would consider accepting any bid for Ashanti from Randgold only if the company topped the AngloGold offer and the offer was in cash.
The Independent reported that Lonmin CEO Sir John Craven "has indicated he does not want to accept shares and will push Randgold to come up with a cash alternative".
Ashanti is both Ghana's biggest foreign-currency earner and a source of national pride. Randgold has said that if it wins the bid the Ashanti name would be kept. If AngloGold's bid is successful the combined company would be called AngloGold Ashanti internationally and Ashanti AngloGold in Ghana.
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