| Wed 15 Oct 2003, 10:31 | | ANGLOGOLD ANNOUNCES REVISED TERMS FOR PROPOSED, RE |
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ANGLOGOLD ANNOUNCES REVISED TERMS FOR PROPOSED, RECOMMENDED MERGER
OF ANGLOGOLD LIMITED AND ASHANTI GOLDFIELDS COMPANY LIMITED
ANGLOGOLD LIMITED
(Registration number 1944/017354/06)
(Incorporated in the Republic of South Africa)
ISIN : ZAE000043485
JSE Share Code : ANG
("AngloGold")
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale or
distribution of securities in any jurisdiction in which such offer,
sale or distribution is not permitted
REVISED TERMS FOR PROPOSED, RECOMMENDED MERGER OF ANGLOGOLD LIMITED
AND ASHANTI GOLDFIELDS COMPANY LIMITED
15 October 2003
Further to the joint announcement made by AngloGold and Ashanti
Goldfields Company Limited ("Ashanti") on 4 August 2003 regarding
the proposed merger of the two companies ("the Merger"), the board
of AngloGold is pleased to announce that the board of Ashanti has
resolved unanimously* to recommend a revised and final merger
proposal.
Under the revised and final terms of the merger (the "Revised
Merger Proposal"), each holder of an Ashanti ordinary share
("Ashanti Share") and each holder of an Ashanti Global Depositary
Security ("Ashanti GDS") will be entitled to elect to receive,
either:
0.29 AngloGold ordinary shares ("AngloGold Shares");or
0.29 AngloGold American Depositary Shares ("AngloGold ADSs"),
for each Ashanti Share or Ashanti GDS. Based on the closing market
price of AngloGold ADSs on the New York Stock Exchange on 14
October 2003 (the last trading day prior to this announcement), the
Revised Merger Proposal values each Ashanti Share at US$10.89 and
the entire issued share capital of Ashanti at approximately
US$1,421 million.
Lonmin Plc ("Lonmin"), which holds 27.6% of Ashanti"s issued
share capital, entered into an undertaking with AngloGold, dated 4
August 2003, to vote its Ashanti Shares in favour of the Merger.
Lonmin may withdraw its support for the Merger only if the board of
Ashanti publicly announces that it has withdrawn its recommendation
or if the transaction agreement entered into between AngloGold and
Ashanti dated 4 August 2003, as amended (the "Transaction
Agreement") is terminated.
In light of the Revised Merger Proposal, Lonmin has irrevocably
undertaken to AngloGold not to have any discussions with Randgold
Resources Limited ("Randgold"), nor to accept or support any
proposal from Randgold unless such proposal includes a fully
underwritten cash alternative which the board of Ashanti determines
to be a superior proposal in accordance with the terms of the
Transaction Agreement.
The Revised Merger Proposal has been made in the context of the
emphatic support of Lonmin and the continued support of the board
of Ashanti. AngloGold continues to believe that the Merger is a
strategic combination bringing together complementary strengths to
create value for the shareholders of both companies. The combined
group will have a powerful investment case with AngloGold bringing
the financial resources and deep level mining technical expertise
to maximise the value of Ashanti"s portfolio of top-tier, low cost
and long life gold mines. As an example, AngloGold management
anticipates that the revised capital expenditure profile at Obuasi
will improve underground working conditions and mine planning,
thereby increasing efficiencies with the objective of reducing
anticipated cash costs at Obuasi by US$20 per ounce in real terms
over the next five years. There is also the potential of at least
US$15 million of annual synergies from reduced financing,
administrative and procurement costs, the consolidation of
ownership at Geita as well as a breadth of technical capabilities
to ensure the optimal development of organic growth opportunities.
The Merger will otherwise be implemented on the same terms and
conditions as those set out in the Transaction Agreement as
announced on 4 August 2003. The Merger is conditional on the
support of the Government of Ghana as shareholder and regulator of
Ashanti, the approval of the scheme of arrangement ("Scheme")
required to implement the Merger by Ashanti shareholders, the
confirmation of the Scheme by the High Court of Ghana and certain
other regulatory approvals and third party consents as detailed in
the 4 August announcement.
As required by the JSE Securities Exchange, the financial
effects of the merger on AngloGold shareholders, assuming the
Revised Merger Proposal, are set out below. These financial effects
have been determined from unaudited consolidated financial
information for the combined group, assuming that the Merger was
implemented on 1 January 2003 for the purposes of the income
statement and on 30 June 2003 for the purposes of the balance
sheet.
AngloGold believes that the pro forma historical information is
not necessarily indicative of the future financial performance of
the combined group. The pro forma historical financial effects of
the Merger on AngloGold shareholders are as follows:
For the six months ended Before the After the Percentage
30 June 2003 and as 30
June 2003 Merger Merger change
(US cps) (US cps) (%)
Net asset value per share (1) 728 1,166 60
Net tangible asset value per
share (1) 549 847 54
EBITDA per share (2) 152 153 1
Headline earnings per share
before Unrealized non-hedge
derivatives (2) 63 50 (21)
Headline earnings per
share (2) 62 68 10
Basic earnings per share (2) 55 61 11
Net debt to total capital
employed 18.6% 16.1%
NOTES:
1. Net asset and net tangible asset value per share refers to
shareholders" equity and has been determined at 30 June 2003
assuming 222,785,154 AngloGold Shares in issue before the Merger
and 261,293,155 AngloGold Shares in issue after the Merger (the
38,508,001 AngloGold Shares issued in the Merger assumes that the
2,296,826 outstanding Ashanti warrants are exercised and the
resulting Ashanti Shares together with the 130,489,386 Ashanti
Shares currently in issue are exchanged in accordance with the
Revised Merger Proposal. All outstanding options over Ashanti
Shares are assumed to be cancelled for cash).
2. The pro forma consolidated income statements for the six
months ended 30 June 2003 and balance sheets at 30 June 2003 have
been compiled from:
- the historical consolidated income statements of AngloGold for
the six months ended 30 June 2003 and the historical consolidated
balance sheets of AngloGold at 30 June 2003, prepared in accordance
with IFRS; and
- the historical consolidated income statements of Ashanti for
the six months ended 30 June 2003 and the historical consolidated
balance sheets of Ashanti at 30 June 2003, prepared in accordance
with UK GAAP, adjusted to an IFRS basis by incorporating the
differences between the two accounting bases.
For the six months ended 30 June 2003, unaudited pro forma
EBITDA, headline earnings, headline earnings before unrealised non-
hedge derivatives and basic earnings per ordinary share have been
calculated based on the weighted average number of AngloGold Shares
in issue of 222,737,513 for the six months ended 30 June 2003
adjusted to reflect the issuance of 38,508,001 AngloGold Shares in
the Merger. Accordingly the adjusted pro forma weighted average
number of AngloGold Shares in issue for the six months ended 30
June 2003 is 261,245,514.
3. The financial effects calculations have been based on publicly
available information only and for this reason may not incorporate
all the necessary adjustments.
4. The financial effects have been calculated on the basis of an
AngloGold share price of US$37 a share.
Save as disclosed, there has been no significant change
affecting any information contained in the announcement of 4 August
2003 and no other significant information or new matter has arisen
that would have been required to be mentioned in that earlier
announcement. There can be no assurance that the Merger will be
implemented. Consequently AngloGold shareholders are advised to
continue to exercise caution when dealing in AngloGold securities
until such further announcement is made.
*According to the announcement by Ashanti on 14 October 2003,
Chester Crocker, Lynda Chalker and Edward Haslam, being directors
of Ashanti, did not take part in the deliberations of the board of
Ashanti relating to the recommendation of the Revised Merger
Proposal. Chester Crocker and Lynda Chalker did not participate
because they or companies in which they have an interest have
entered into commercial contracts with AngloGold, its subsidiaries
or its major shareholder, Anglo American plc. Edward Haslam did not
participate because he is an executive director of Ashanti"s
largest shareholder, Lonmin Plc, which has given an undertaking to
AngloGold to support the Revised Merger Proposal.
