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ANGLOGOLD ANNOUNCES REVISED TERMS FOR PROPOSED, RECOMMENDED MERGER
OF ANGLOGOLD LIMITED AND ASHANTI GOLDFIELDS COMPANY LIMITED
ANGLOGOLD LIMITED
(Registration number 1944/017354/06)
(Incorporated in the Republic of South Africa)
ISIN : ZAE000043485
JSE Share Code : ANG
("AngloGold")
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale or
distribution of securities in any jurisdiction in which such offer,
sale or distribution is not permitted
REVISED TERMS FOR PROPOSED, RECOMMENDED MERGER OF ANGLOGOLD LIMITED
AND ASHANTI GOLDFIELDS COMPANY LIMITED
15 October 2003
Further to the joint announcement made by AngloGold and Ashanti
Goldfields Company Limited ("Ashanti") on 4 August 2003 regarding
the proposed merger of the two companies ("the Merger"), the board
of AngloGold is pleased to announce that the board of Ashanti has
resolved unanimously* to recommend a revised and final merger
proposal.
Under the revised and final terms of the merger (the "Revised
Merger Proposal"), each holder of an Ashanti ordinary share
("Ashanti Share") and each holder of an Ashanti Global Depositary
Security ("Ashanti GDS") will be entitled to elect to receive,
either:
0.29 AngloGold ordinary shares ("AngloGold Shares");or
0.29 AngloGold American Depositary Shares ("AngloGold ADSs"),
for each Ashanti Share or Ashanti GDS. Based on the closing market
price of AngloGold ADSs on the New York Stock Exchange on 14
October 2003 (the last trading day prior to this announcement), the
Revised Merger Proposal values each Ashanti Share at US$10.89 and
the entire issued share capital of Ashanti at approximately
US$1,421 million.
Lonmin Plc ("Lonmin"), which holds 27.6% of Ashanti"s issued
share capital, entered into an undertaking with AngloGold, dated 4
August 2003, to vote its Ashanti Shares in favour of the Merger.
Lonmin may withdraw its support for the Merger only if the board of
Ashanti publicly announces that it has withdrawn its recommendation
or if the transaction agreement entered into between AngloGold and
Ashanti dated 4 August 2003, as amended (the "Transaction
Agreement") is terminated.
In light of the Revised Merger Proposal, Lonmin has irrevocably
undertaken to AngloGold not to have any discussions with Randgold
Resources Limited ("Randgold"), nor to accept or support any
proposal from Randgold unless such proposal includes a fully
underwritten cash alternative which the board of Ashanti determines
to be a superior proposal in accordance with the terms of the
Transaction Agreement.
The Revised Merger Proposal has been made in the context of the
emphatic support of Lonmin and the continued support of the board
of Ashanti. AngloGold continues to believe that the Merger is a
strategic combination bringing together complementary strengths to
create value for the shareholders of both companies. The combined
group will have a powerful investment case with AngloGold bringing
the financial resources and deep level mining technical expertise
to maximise the value of Ashanti"s portfolio of top-tier, low cost
and long life gold mines. As an example, AngloGold management
anticipates that the revised capital expenditure profile at Obuasi
will improve underground working conditions and mine planning,
thereby increasing efficiencies with the objective of reducing
anticipated cash costs at Obuasi by US$20 per ounce in real terms
over the next five years. There is also the potential of at least
US$15 million of annual synergies from reduced financing,
administrative and procurement costs, the consolidation of
ownership at Geita as well as a breadth of technical capabilities
to ensure the optimal development of organic growth opportunities.
The Merger will otherwise be implemented on the same terms and
conditions as those set out in the Transaction Agreement as
announced on 4 August 2003. The Merger is conditional on the
support of the Government of Ghana as shareholder and regulator of
Ashanti, the approval of the scheme of arrangement ("Scheme")
required to implement the Merger by Ashanti shareholders, the
confirmation of the Scheme by the High Court of Ghana and certain
other regulatory approvals and third party consents as detailed in
the 4 August announcement.
As required by the JSE Securities Exchange, the financial
effects of the merger on AngloGold shareholders, assuming the
Revised Merger Proposal, are set out below. These financial effects
have been determined from unaudited consolidated financial
information for the combined group, assuming that the Merger was
implemented on 1 January 2003 for the purposes of the income
statement and on 30 June 2003 for the purposes of the balance
sheet.
AngloGold believes that the pro forma historical information is
not necessarily indicative of the future financial performance of
the combined group. The pro forma historical financial effects of
the Merger on AngloGold shareholders are as follows:
For the six months ended Before the After the Percentage
30 June 2003 and as 30
June 2003 Merger Merger change
(US cps) (US cps) (%)
Net asset value per share (1) 728 1,166 60
Net tangible asset value per
share (1) 549 847 54
EBITDA per share (2) 152 153 1
Headline earnings per share
before Unrealized non-hedge
derivatives (2) 63 50 (21)
Headline earnings per
share (2) 62 68 10
Basic earnings per share (2) 55 61 11
Net debt to total capital
employed 18.6% 16.1%
NOTES:
1. Net asset and net tangible asset value per share refers to
shareholders" equity and has been determined at 30 June 2003
assuming 222,785,154 AngloGold Shares in issue before the Merger
and 261,293,155 AngloGold Shares in issue after the Merger (the
38,508,001 AngloGold Shares issued in the Merger assumes that the
2,296,826 outstanding Ashanti warrants are exercised and the
resulting Ashanti Shares together with the 130,489,386 Ashanti
Shares currently in issue are exchanged in accordance with the
Revised Merger Proposal. All outstanding options over Ashanti
Shares are assumed to be cancelled for cash).
2. The pro forma consolidated income statements for the six
months ended 30 June 2003 and balance sheets at 30 June 2003 have
been compiled from:
- the historical consolidated income statements of AngloGold for
the six months ended 30 June 2003 and the historical consolidated
balance sheets of AngloGold at 30 June 2003, prepared in accordance
with IFRS; and
- the historical consolidated income statements of Ashanti for
the six months ended 30 June 2003 and the historical consolidated
balance sheets of Ashanti at 30 June 2003, prepared in accordance
with UK GAAP, adjusted to an IFRS basis by incorporating the
differences between the two accounting bases.
For the six months ended 30 June 2003, unaudited pro forma
EBITDA, headline earnings, headline earnings before unrealised non-
hedge derivatives and basic earnings per ordinary share have been
calculated based on the weighted average number of AngloGold Shares
in issue of 222,737,513 for the six months ended 30 June 2003
adjusted to reflect the issuance of 38,508,001 AngloGold Shares in
the Merger. Accordingly the adjusted pro forma weighted average
number of AngloGold Shares in issue for the six months ended 30
June 2003 is 261,245,514.
3. The financial effects calculations have been based on publicly
available information only and for this reason may not incorporate
all the necessary adjustments.
4. The financial effects have been calculated on the basis of an
AngloGold share price of US$37 a share.
Save as disclosed, there has been no significant change
affecting any information contained in the announcement of 4 August
2003 and no other significant information or new matter has arisen
that would have been required to be mentioned in that earlier
announcement. There can be no assurance that the Merger will be
implemented. Consequently AngloGold shareholders are advised to
continue to exercise caution when dealing in AngloGold securities
until such further announcement is made.
*According to the announcement by Ashanti on 14 October 2003,
Chester Crocker, Lynda Chalker and Edward Haslam, being directors
of Ashanti, did not take part in the deliberations of the board of
Ashanti relating to the recommendation of the Revised Merger
Proposal. Chester Crocker and Lynda Chalker did not participate
because they or companies in which they have an interest have
entered into commercial contracts with AngloGold, its subsidiaries
or its major shareholder, Anglo American plc. Edward Haslam did not
participate because he is an executive director of Ashanti"s
largest shareholder, Lonmin Plc, which has given an undertaking to
AngloGold to support the Revised Merger Proposal.
Johannesburg
15 October 2003
AngloGold"s JSE Sponsor: UBS
For further information contact:
AngloGold
Steve Lenahan +27 83 308 2200
Peta Baldwin +27 11 637 6647
Charles Carter +1 212 750 7999
Tomasz Nadrowski +44 7958 749555
+1 917 912 4641
Andrea Maxey +61 8 9425 4604
UBS Investment Bank
James Hartop +44 20 7567 8000
First Africa
Kofi Adjepong-Boateng +27 11 327 3666
Citigate Sard Verbinnen
(US Media)
Paul Verbinnen +1 212 687 8080
Citigate Dewe Rogerson
(UK Media)
Patrick Donovan +44 20 7638 9571
Channel 2
(Ghanaian Media)
David Ampofo +233 21 666 643
CONFERENCE CALL DETAILS
A conference call will take place on 15 October 2003 at 16:00
Johannesburg time, 15:00 London time, 10:00 New York time and 22:00
Perth time. The conference ID number is #3396722.
The dial in numbers, by country, are:
North America +1 800 267 9155 or +1 706 634 0083,
United Kingdom +44 800 953 0406 or +44 1452 560 299
(and Europe),
Australia +61 800 766 788 or +61 28 228 7000,
and
South Africa +27 800 99 4050
Ghana +44 1452 560 299
To access the replay, which will be available two hours after
completion of the call, dial one of the following numbers and
reference the same conference ID:
North America +1 800 642 1687 or +1 706 645 9291,
United Kingdom +44 800 953 1533 or +44 1452 55 0000
(and Europe),
Australia +61 800 766 700 or +61 28 228 7000,
and
South Africa +27 800 99 4050
Ghana +44 1452 560 259
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this announcement are forward-looking
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including without limitation, those statements concerning
(i) timing, fulfillment of conditions, tax treatment and completion
of the Merger, (ii) the value of the transaction consideration,
(iii) expectations regarding production and cost savings at the
combined group"s operations and its operating and financial
performance and (iv) synergies and other benefits anticipated from
the Merger. Although AngloGold and Ashanti believe that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to have been correct.
For a discussion of important terms of the Merger and important
factors and risks involved in the companies" businesses, which
could cause the combined group"s actual operating and financial
results to differ materially from such forward-looking statements,
refer to AngloGold"s and Ashanti"s filings with the US Securities
and Exchange Commission (the "SEC"), including AngloGold"s annual
report on Form 20-F for the year ended 31 December 2002, filed with
the SEC on 7 April 2003 and Ashanti"s annual report on Form 20-F
for the year ended 31 December 2002, filed with the SEC on 17 June
2003 and any other documents in respect of the Merger that are
furnished to the SEC by AngloGold or Ashanti under cover of Form 6-
K.
Neither AngloGold, Ashanti nor the combined group undertakes any
obligation to update publicly or release any revisions to publicly
update any forward-looking statements discussed in this
announcement, whether as a result of new information, future events
or otherwise.
ADDITIONAL INFORMATION
In connection with the Merger, AngloGold will file with, or
otherwise furnish to, the SEC a scheme document/prospectus.
Investors and security holders are urged to carefully read the
scheme document/prospectus regarding the Merger when it becomes
available, because it will contain important information.
Investors and security holders may obtain a free copy of the scheme
document/prospectus (when it is available) and other documents
containing information about AngloGold and Ashanti, without charge,
at the SEC"s website at www.sec.gov. Copies of the scheme
document/prospectus together with any SEC filings that may be
incorporated by reference in the scheme document/prospectus may
also be obtained free of charge by directing a request to:
AngloGold Limited, 11 Diagonal Street, Johannesburg 2001, PO Box
62117, Marshalltown 2107, South Africa, Attention: Chris R. Bull,
Company Secretary, telephone +27 11 637 6000, fax: +27 11 637 6624.
UBS Investment Bank and First Africa Group Holdings (Pty)
Limited ("First Africa") are acting for AngloGold and no one else
in connection with the Merger and will not be responsible to anyone
other than AngloGold for providing the protections afforded to
clients of UBS Investment Bank or First Africa or for providing
advice in relation to the Merger.
Date: 15/10/2003 07:00:11 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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