/ 12 October 1999

LONMIN BIDS FOR ASHANTI

BRITISH mining group Lonmin on Monday formally launched a takeover bid for Ashanti Goldfields, but only if the Ghanaian gold outfit resolves a delicate financial position caused by the recent spike in gold prices. Lonmin valued Ghana’s stock market heavyweight at $7 a share, 87% higher than its closing share price Friday, in its acquisition offer of a 32-43 stock swap to create a new African precious metals giant. But it set several decisions for the landmark deal to go through. Lonmin said it wanted Ghana’s government, which owns 20 percent of Ashanti, to pledge “irrevocable” support to the deal. The merger is also conditional on Ashanti gaining respite from an alarming situation with so-called hedged positions that have become exposed since the gold price started rising sharply two weeks ago.