| Wed 13 Aug 2003, 12:03 | | Randgold's Ashanti offer starts to take concrete s |
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Randgold's Ashanti offer starts to take concrete shape
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Resources Correspondent
RANDGOLD, which may take on AngloGold with a counter offer for Ghana's Ashanti Goldfields, said it hoped to make a concrete offer as soon as possible.
The company said it was soon to enter into a mutual due diligence with Ashanti.
"Following which Randgold Resources would hope to be in a position to make a definitive proposal as quickly as possible," said the company.
On Friday Randgold tabled an indicative all-share bid of $1,4bn to $1,3bn for Ashanti, depending on its share price. This trumped AngloGold's offer of about $1,1bn already tabled for the Ghanaian gold mining company.
On Sunday, AngloGold said it believed its offer for Ashanti Goldfields would be more attractive than any offer that Randgold might make.
Analysts yesterday were dismissive of any suggestion that Randgold had either the money or the technical know-how to add value to Ashanti and present an offer that would be attractive to shareholders.
However, presenting Randgold results for the quarter to the end of June, CEO Mark Bristow said the company had the technical know-how as well as enough money to make any bid for Ashanti attractive to the company.
"We have discovered and built the Morila mine in Mali and financed it ourselves through 100% project finance," said Bristow.
Bristow said that it was not always a company's balance sheet that was important but the value of the resource.
Much of the potential for future development at Ashanti would be through the development of the deep level gold reserves at Ashanti's Obuasi Deep mine. Bristow said that much deep level mining technology was not proprietary, indicating that if Randgold were successful in a bid for Ashanti it could buy the relevant technology.
He also said Randgold had links with companies that operated deep level projects through SA's Western Areas South Deep mine.
Mark Madeyski, an analyst with Afrifocus Securities in Johannesburg pointed out, however, that South Deep was operated by Placer Dome.
Madeyski said Randgold was a "first class exploration company" but questioned the company's operational track record, highlighting that AngloGold operated the Morila mine in Mali.
Bristow said Randgold's proposed bid for Ashanti was intended to create a major independent pan African gold company.
"The merged business would benefit from cash resources and development," said Bristow.
Roger Kebble, chairman of Randgold & Exploration (R&E), which has a 42,9% stake in Randgold, said R&E fully supported the Randgold proposal. He said it "presents Ashanti with a genuine and attractive offer".
Kebble said R&E had no plans to lower its stake in Randgold to below 36% as had previously been stipulated by the SA Reserve Bank.
However, he did say that if Randgold did take over Ashanti, the company would need to get the Bank's permission to lower its stake in Randgold as any takeover would dilute Randgold & Resources' stake. Kebble said that issue was being "addressed with the Reserve Bank".
Randgold's net profit in the quarter was $16,6m compared with $17,106m in the three months to the end of March. Revenue from gold sales fell to 30,67m from $31,38m in the previous March quarter.
Net profit, though, when compared with the June quarter last year tripled from the $5,31m.
R&E, which owns 42,9% of Randgold, reported a net profit of R200,62m in the six months to June compared with a R45,m in the same period last year.
Aug 13 2003 08:35:23:000AM Julie Bain Business Day 1st Edition
Wednesday
13 August 2003
