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14.10.2003 Business & Finance

Randgold Banks On Ashanti Rejecting Anglogold's Bid

By Business Day
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RANDGOLD Resources CEO Mark Bristow says he is confident the Ashanti board will revoke its agreement backing AngloGold's bid for the Ghanaian gold company today.

After much scepticism about the Randgold bid from gold industry analysts Bristow insisted yesterday that the market was seriously viewing his company's offer for Ashanti.

Bristow said Randgold's offer was 16% higher than AngloGold's.

AngloGold, though, has argued that its mining experience and its more robust balance sheet would add greater value to Ashanti than Randgold would be able to do. This was disputed by Bristow, who maintained that with the existing money a merged Randgold and Ashanti would expand Ashanti's operations. Randgold was just as well positioned as AngloGold to fully develop what was viewed as Ashanti's key asset, Obuasi Deep.

Analysts have suggested that if Ashanti did recommend the Randgold offer it was likely that AngloGold would increase its bid.

Last week AngloGold CEO Bobby Godsell said it was "hard to see where value is being created" through the Randgold bid.

Over the past few weeks Bristow has carried out a vigorous campaign, trying to win investors over. He said that Randgold had secured a credit facility of $250m through five international banks and that the company had more than enough money to complete the deal.

The government of Ghana, which has a "golden share" that gives it the power to veto any deal which fundamentally changes the structure of Ashanti, has taken a back seat in the process.

It has said that the Ashanti board should decide which deal it believed would be best for shareholders.

With an election coming up next year its final decision would be crucial, analysts said.

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