Fresh bid planned for Ashanti

Ashanti is Ghana's biggest employer

The spurned bidder for Ghana's biggest gold mining company has vowed to stay in the running with a new offer.

UK-based mining firm Randgold Resources is getting ready to raise its bid from the $1.5bn it is worth at current prices.

The fresh approach will be unveiled "within days", Finance Director Roger Williams told BBC News Online.

Our bid will keep the Ashanti dream and brand alive, rather than see a 100-year-old African company disappear Roger Williams, Randgold

Ashanti's board last week backed a bid from AngloGold - part of the giant South African Anglo-American group.

At about $1.4bn, the Anglo bid is not as lucrative as Randgold's, although both are completely share-based.

But analysts have said investors may see it as less risky that the one from the smaller company, which would leave current Ashanti shareholders with a majority 70% stake in the new, merged company.

Lonmin, another London-based mining company is Ashanti's biggest single shareholder amd holds 27.6% of its stock.

It has already committed itself to back the Anglo bid unless the Ashanti board changes its mind about its support, or Randgold comes up with a fully cash-funded bid.

'Dreams'

The other key shareholder is the Ghanaian government.

How it will vote its 17% stake remains unclear.

But Randgold believes that its bid may score with both the government and local shareholders by ensuring that Ashanti will continue as a Ghanaian company.

"Our bid will keep the Ashanti dream and brand alive, rather than see a 100-year-old African company disappear," Mr Williams said.

"We will also take (the company) into the London market, rather than onto the higher-tax Johannesburg market."

Following the news that Randgold was preparing to up its bid, the company's shares slipped in London, falling 2.6% to 1,375 pence by 1030 GMT.

Recovery

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 mining company in terms of reserves.

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

The Ghanian government hopes that the fresh investment would allow Ashanti to expand output substantially at its gold mines.