Ghanaian mining firm Ashanti Goldfields has backed a takeover offer from South Africa's AngloGold, brushing off a higher bid from Randgold Resources
Ashanti is Ghana's biggest employer
Ashanti's board said on Monday it had unanimously backed the AngloGold offer, describing it as "in the best interests of Ashanti's shareholders, employees, and the people of Ghana".
The move comes three days after Randgold upped the stakes in a long-running battle to buy Ashanti by tabling a fresh bid which eclipsed AngloGold's offer.
Randgold's latest bid values Ashanti at about $1.7bn, against AngloGold's most recent offer - also revised upwards - of $1.5bn.
Both would-be buyers are proposing to pay for the acquisition entirely in shares.
Randgold said it would not comment until it had studied Ashanti's decision.
The race to buy Ashanti, Ghana's largest employer, began in May when AngloGold approached it with a takeover offer valuing the firm at about $900m.
AngloGold, a subsidiary of mining giant Anglo American, is keen to buy Ashanti in order to expand its operations beyond South Africa.
Its bid is supported by Ashanti's biggest shareholder, Lonmin.
Anglo, with a market value of about $8.5bn, would be able to support higher levels of investment in Ashanti than the far smaller Randgold.
But any takeover of Ashanti would also require the support of the Ghanaian government, the company's second biggest shareholder.
There has been speculation that the government may come under pressure to block Anglo's bid because of resentment in west Africa over the growing power of South African corporations.
But with Ashanti in urgent need of cash to fund future expansion, most investors expect the deal to go through.