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Last Updated: Wednesday, 15 October, 2003, 11:15 GMT 12:15 UK
Ashanti board backs Anglo bid
Gold from an Ashanti mine in Ghana
Ashanti is Ghana's biggest employer
Ghana's biggest gold miner, Ashanti Goldfields, has decided to back a $1.4bn buyout offer from UK-South African giant AngloGold.

Anglo clinched the deal by raising its offer to 29 shares per 100 Ashanti shares from 26.

Ashanti's shareholders - including Ghana's government, which holds 17% - must now back the deal.

But jilted suitor Randgold Resources is considering upping its own $1.5bn offer by offering more cash and fewer shares.

The response of investors was to back Anglo and sell Randgold shares.

By 1015 GMT in London, shares in Anglo American, AngloGold's parent, were up almost 1%, while Randgold shares fell 2%.

Shares in Lonmin, the London-based company which owns 27.6% of Ashanti, were up 2.2%.

Government stake

In a statement, Lonmin said it stood by an August agreement with Anglo to back its bid.

It had "irrevocably undertaken" to talk to Randgold only if the company offered a fully cash-based bid and Ashanti's board switched its own backing away from Anglo.

But the Ghanaian Government, which has the final say over merger proposals, also has to back the deal.

Speculation within Ghana has previously suggested that some members of the administration are uncertain about letting Anglo take over, amid suspicion in some West African quarters of the strength of South Africa.

Ashanti was a state-owned concern until the late 1990s, at which time it teetered on the edge of bankruptcy.

It was rescued by a deal which included a partial takeover by Lonmin.

The incorporation of Ashanti into AngloGold would create the world's largest gold miner in terms of reserves.

In production terms, new AngloGold would be roughly on a par with Newmont Mining Corporation of the US.

Game over

Recent consolidation among mining groups has come because of tough market conditions, Sir Sam Jonah, Ashanti chief executive, told the BBC's World Business Report.

"There is nothing unusual about that. That is the usual response of industries which face uncertain market conditions," said Sir Sam.

He said he was confident AngloGold's offer represented "good value" for shareholders and would go through.

Sir Sam insisted that only an underwritten cash bid from Randgold could derail AngloGold's takeover - and such a bid did not appear to be forthcoming.

"On the basis of the paper transactions put forward by both Randgold and AngloGold, I think the game is over for Randgold," said Sir Sam.

Sir Sam Jonah
"I think the game is over for Randgold."

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