UPDATE: Randgold Bid For Moto Is "Superior" To Red Back's -CEO
July 16 2009 - 11:15AM
Dow Jones News
Randgold Resources Ltd.'s (RRS.LN) half-cash, half-shares offer
for Moto Goldmines Ltd. (MGL.T) is "significantly superior" to a
rival offer for the gold exploration firm, Randgold's chief
executive said Thursday.
"We're very mindful that bidding wars are destructive in Africa.
We've put a lot of effort into delivering something that is
different and we think significantly superior to what has been
proposed to [Moto's] board," Mark Bristow told Dow Jones
Newswires.
Randgold teamed up with AngloGold Ashanti Ltd. (AU) on a deal
that values Moto at about 546 million Canadian dollars ($488
million).
Moto's board in June endorsed a CAD513 million all-share
acquisition by Red Back Mining Inc. (RBI.T), and would have to pay
a CAD15.3 million break fee if it walks away.
Bristow said Randgold's mix of shares and cash allow investors a
broader range of options, including cashing out of their investment
by taking cash and then selling off a liquid stock.
"Clearly the board of Moto has decided to sell. And we're very
motivated to convince them we are the right bias," Bristow
said.
For Randgold shareholders, the deal offers entree into Congo, a
mineral-rich but potentially risky country.
"It's a big asset. It is quite high risk. But bringing in Anglo
as a partner shares the risk," Bristow said.
AngloGold, Africa's largest producer of the precious metal, has
agreed to part-fund the acquisition in exchange for an indirect 50%
stake in Moto, and separately said it will pay $244 million after
Randgold closes its deal.
Randgold, incorporated in Jersey, operates a gold mine in Mali,
and is developing projects in Ivory Coast and Senegal.
Moto in a statement said it had received the offer.
"The board of directors of Moto is considering the offer to
determine whether it is a superior offer to the plan of arrangement
that has been agreed with Red Back Mining Inc.," Moto said.
Red Back wasn't immediately available to comment.
Company Web site: www.randgoldresources.com
-By Jeffrey Sparshott, Dow Jones Newswires; +44 (0)207 842 9347;
jeffrey.sparshott@dowjones.com
(By Robb M. Stewart in Johannesburg contributed to this
article.)