Russwinter, Ram... News bulletin regarding potential Rangy takeover scenarios. Much is being discussed now in the industry about such possibilities. It does appear the Western Areas deal will not happen as planned. Randgold Resources has called a meeting for tomorrow in Paris. Bob
Western Areas, Randgold Are Targets After Merger's Disruption Johannesburg, Jan. 18 ( Bloomberg ) -- Western Areas Ltd. and
Randgold & Exploration Co., owners of some of the world's biggest gold deposits [AND JUST HOW BIG IS MORILA? - BOB], could be takeover targets after their plans to merge were delayed, analysts said. The companies' plans to combine with five other gold companies to form the world's ninth-biggest gold producer are
under review after one of the companies, Randfontein Estates Ltd.,accepted a rival offer from Harmony Gold Mining Co. Ltd.Randfontein's mine accounts for 80 percent of the group's output. Western Areas has said even though Randfontein is no longer part of the combination, it still wants to merge with the other
companies and intends to re-examine its plan, which was due to be completed in February.
''They are cash-strapped,'' said Joachim Berlenbach, an analyst at Standard Equities. ''If Western Areas shareholders get a good offer they could take it. They are so frustrated.''
Western Areas will have about $135 million in cash after it has paid out about $100 million to shareholders in a special dividend next month. It needs about $240 million to develop mines
planned by the merged companies, said Berlenbach.
The future of the proposed merger has been clouded by the resignation of Brett Kebble, Western Areas' chairman and the architect of the merger. Kebble made an unauthorized loan to Durban Roodepoort Deep Ltd., instructing it to buy Randfontein shares in a bid to block the takeover, Western Areas said. Investigation The Johannesburg Stock Exchange is investigating the share trades and will give its findings to the Financial Services Board and the Securities Regulation Panel, government regulators that have said they could ask the police to file criminal charges. Western Areas, which has a market value of about $371 million owns a half stake in the South Deep deposit, described by Magnum Global Investment fund manager Nick Goodwin as the best gold reserve ever discovered.
A likely buyer is Placer Dome Inc., which owns the rest of the deposit, the right to operate the mine being built and the right to match any offer made to Western Areas, said analysts.AngloGold could also be a buyer and may want to purchase the stake to swap for the Driefontein mine, which rival Gold Fields Ltd. won control of last year, they said. ''We have the right of first refusal,'' said Patrick Evans, a Placer spokesman. ''There is no need for us to panic. No
discussions have taken place.'' Gold Fields operates a mine near Western Areas and a stake in
that company's planned mine could help it cut costs while AngloGold has operations adjacent to Driefontein. Randgold has a market value of $49 million even though it owns 61 percent of a $123 million company that is digging some of the world's lowest cost gold mines in Mali. These, analysts said, could be bought by AngloGold, which operates the Sadiola mine in the West African country, or a North American producer such as Barrick Gold Corp, which last year made its first African investment. Both companies are undervalued, analysts said. Western Areas'share price fell 32 percent in the two years to Dec. 31, the second-worst performance on the Johannesburg All Gold Index. AngloGold declined to comment while Gold Fields' spokesman Willie Jacobsz said ''nothing is underway''. |
