AngloGold looks likely to win battle for Ashanti
Acquisition
By Hilton Shone
Anglogold's revised $1.4-billion offer for Ashanti Goldfields all but sets the seal on a fiercely contested battle with Randgold Resources for the Ghana-based gold miner, analysts say.
Randgold could increase its offer in a bid to frustrate AngloGold, but the country's top producer is still most likely to walk off with the prize, they add.
This week AngloGold increased its all-scrip offer to 29 shares for every 100 Ashanti shares. This compares with its initial offer of 26 for every 100, and takes the value of its bid to $1.44-billion (11 per Ashanti share) from $1.09-billion.
Randgold is offering one of its shares for every two Ashanti shares in an all-share offer that values Ashanti at $1.55 billion (11.83 per Ashanti share) but Randgold chief executive Mark Bristow was quoted as saying that he had not thrown in the towel.
"Randgold will probably put in a revised bid to frustrate AngloGold; there's a lot of ego at play here. But we think it's pretty much game and set - if not match - to AngloGold," an analyst at a leading international investment bank believes.
"However AngloGold does seem convinced that it has enough backing for its bid to be accepted," the analyst added, noting that the board of Ashanti has recommended that shareholders accept the sweetened offer.
UK-listed mining group Lonmin, which holds 27.6% of Ashanti, is committed to AngloGold and can change its support only if the Ashanti board withdraws its recommendation or if Randgold comes up with a fully underwritten cash alternative that the Ashanti board considers superior to AngloGold's existing bid.
Besides various regulatory hurdles, the main outstanding issue now is the decision of the government of Ghana. It holds 17% of Ashanti as well as a "golden share" that gives it the casting vote on the company's board.
However, government officials have indicated that they will be guided by the Ashanti board and their support now seems to be a matter of time. The government has appointed Société Générale to advise it, but when the French bank will release its findings is unknown.
AngloGold has indicated its revised bid is final. While it might be legally entitled to raise the stakes again, chief executive Bobby Godsell was at pains to explain no further bid would be made.
"I want there to be no confusion on this. Beyond regulatory meanings there is a plain English meaning and that is the meaning we are attaching to the term," he was quoted by Reuters as saying.
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