Statement re Revised Terms re Proposed Merger
October 15 2003 - 3:01AM
UK Regulatory
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
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Merger only if the board of Ashanti publicly announces that it has withdrawn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 30 June Before the After the Percentage
2003 Merger Merger change
(US cps) (US cps) (%)
and as at 30 June 2003
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 63 50 (21)
unrealised non-hedge derivatives 2
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.
END