17th Jul 2009 07:00
"Not for dissemination in the United States or through any US newswire service"
NEWS RELEASE
FOR IMMEDIATE RELEASE TSX Code - MGL
JULY 17, 2009 AIM Code - MOE
MOTO ANNOUNCES RECEIPT OF OFFER FROM RANDGOLD RESOURCES
PERTH, WESTERN AUSTRALIA - Moto Goldmines Limited ("Moto") confirms that it has received an unsolicited offer from Randgold Resources Limited ("Randgold") (LSE:RRS) (NASDAQ:GOLD) for the acquisition of all of the shares of Moto by way of a proposed plan of arrangement. The board of directors of Moto are 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. and was announced on June 1, 2009. Moto will advise by news release in due course its conclusions with respect to the Randgold offer.
On July 16, 2009 Randgold issued a news release announcing a proposed plan of arrangement with Moto. The text of the news release is provided below:
"London, United Kingdom, 16 July, 2009 - Randgold Resources Limited (LSE:RRS) (NASDAQ:GOLD) ("Randgold") today announced that it has approached the Board of Directors of Moto Goldmines Limited ("Moto") (TSX:MGL) (AIM:MOE) and proposed to enter into an arrangement agreement providing for the exchange of each outstanding common share of Moto for the equivalent of C$5.00 per share (as at 15 July 2009) (the "Proposed Randgold Transaction"). Under the Proposed Randgold Transaction, Moto shareholders would receive 0.07061 of an ordinary share of Randgold (or, where applicable, 0.07061 of an American Depositary Share ("ADS") of Randgold) per Moto share. In addition, Moto shareholders would be provided the option to elect to receive (in lieu of Randgold shares or ADSs) cash consideration of US$4.47 per Moto share (C$5.00 based on the noon exchange rate published by the Bank of Canada on 15 July 2009) in respect of all or some of their Moto shares, subject to proration based on an aggregate maximum cash amount payable to all Moto shareholders under the Proposed Randgold Transaction of US$244 million. Assuming full take-up of the cash alternative Randgold would expect to issue a total of approximately 3.9 million shares (including shares represented by ADSs) and pay a total cash amount of approximately US$244 million to Moto shareholders. As detailed more fully below, the Board of Randgold believes that the Proposed Randgold Transaction is superior to the transaction proposed by Red Back Mining Inc. ("Red Back") in the Red Back Agreement (as defined below) (the "Red Back Transaction").
Based on the closing price of Randgold ADSs on 15 July 2009 of US$63.26 per ADS, the Proposed Randgold Transaction values Moto at approximately US$488 million (C$546 million) and represents a premium to Moto shareholders of:
* approximately 7%, based on the closing price of Moto's common shares on the Toronto Stock Exchange and the closing price of Randgold's ADSs on NASDAQ, adjusted to Canadian dollars, as at 15 July 2009;
* approximately 12%, based on the 20-day volume-weighted average price of Moto's common shares on the Toronto Stock Exchange and the 20-day volume weighted average price of Randgold's ADSs on NASDAQ, adjusted to Canadian dollars, to 15 July 2009;
* approximately 11%, based on the closing price of Moto's common shares on the Toronto Stock Exchange as at 29 May 2009, the last business day prior to the announcement of the Red Back Transaction and the closing price of Randgold's ADSs on NASDAQ, adjusted to Canadian dollars, as at 15 July 2009; and
* approximately 60%, based on the 20-day volume-weighted average price of Moto's common shares on the Toronto Stock Exchange to 29 May 2009, the last business day prior to the announcement of the Red Back Transaction and the 20-day volume weighted average price of Randgold's ADSs on NASDAQ, adjusted to Canadian dollars, to 15 July 2009.
Joint Venture with AngloGold Ashanti
Randgold and AngloGold Ashanti Limited ("AngloGold") have agreed to cooperate in respect of the Proposed Randgold Transaction. In that regard, AngloGold has agreed to fully fund the cash alternative described above in partial payment for an indirect 50% interest in Moto which it would acquire upon completion of the Proposed Randgold Transaction. Pursuant to AngloGold's agreement to acquire its indirect interest as described, as is customary for transactions of this nature, an application has been made by AngloGold and is currently under consideration by the South African Reserve Bank. In addition, following completion of the Proposed Randgold Transaction, AngloGold would be jointly responsible with Randgold for funding the development of the Moto Gold Project for the collective benefit of the shareholders of all three companies. Randgold would be appointed operator of the project.
Randgold and AngloGold have received the full support from their respective boards of directors for the Proposed Randgold Transaction. Neither Randgold nor AngloGold requires shareholder approval in order to proceed with the Proposed Randgold Transaction.
Conditions to the Proposed Randgold Transaction
The Proposed Randgold Transaction is subject to Moto terminating its arrangement agreement dated 1 June 2009 between Red Back and Moto, as amended effective 26 June 2009 (the "Red Back Agreement"), Randgold and Moto entering into a definitive arrangement agreement and Moto announcing its recommendation of the Proposed Randgold Transaction.
The Proposed Randgold Transaction would also be subject to certain other customary closing conditions, which would be set forth in a definitive agreement governing the terms of the Proposed Randgold Transaction and would be substantially similar to the conditions set forth in the Red Back Agreement, including the receipt of any regulatory approvals and the approval of the Proposed Randgold Transaction by not less than 66 2/3% of the outstanding shares and options of Moto, voting as a single class and a simple majority of the votes cast in person or by proxy by Moto shareholders at the special meeting called to approve the Proposed Randgold Transaction.
The definitive agreement would also provide that if Moto shareholders elect to receive in aggregate more than the maximum aggregate amount of cash offered under the Proposed Randgold Transaction, (a) the amount of cash consideration available to Moto shareholders making a cash election pursuant to the Proposed Randgold Transaction would be allocated pro rata among all Moto shareholders making valid cash elections; and (b) each Moto shareholder electing cash would instead receive Randgold ordinary shares (or ADSs, as applicable) as consideration for the amount by which the value of such Moto shareholder's original cash election exceeds the amount of cash so allocated to such Moto shareholder, in lieu of the cash that the Moto shareholder would have received absent proration.
Superior proposal
Randgold believes that the Proposed Randgold Transaction satisfies all the requirements of a "Superior Proposal", as defined in the Red Back Agreement, as it:
* is reasonably capable of being completed without undue delay;
* relates to the acquisition of 100% of the outstanding Moto shares;
* is available to all Moto shareholders on the same terms and conditions;
* is not subject to a due diligence condition; and
* is fully financed.
In addition, Moto shareholders would benefit from:
* a premium to the value of the Red Back Transaction of approximately 9% based on the closing share prices of Red Back and Randgold as at 15 July 2009 and approximately 17% based on the 20-day volume-weighted average prices of Red Back and Randgold to 15 July 2009;
* the certainty of cash to lock in the offer premium. This compares to the Red Back Transaction, which was initially worth C$4.70 per Moto share, is currently worth only C$4.59 and, since announcement of the Red Back Transaction, has traded as low as C$3.83;
* the liquidity of Randgold's stock - over the last month the average aggregate daily trading value of Randgold shares on the London Stock Exchange and Randgold ADSs on NASDAQ was US$108 million, compared to US$10 million for Red Back's shares on the Toronto Stock Exchange and an aggregate of US$1 million for Moto's shares on the Toronto Stock Exchange and the London Stock Exchange's Alternative Investment Market, adjusted to United States dollars, to 15 July 2009;
* the ability to participate in the upside of the Moto Gold Project as well as Randgold's gold mines and world class development and exploration pipeline; and
* Randgold's strong, experienced technical and management teams that have proven their ability to bring assets into production in West Africa which will be combined in the development of the Moto Gold Project with the technical and financial capabilities of AngloGold, Africa's largest gold producer.
Support from Moto shareholders
Shareholders of Moto representing an aggregate of 39.4 million shares, or 36.1% of the issued and outstanding common shares of Moto, have agreed to support the Proposed Randgold Transaction and to vote against the existing Red Back Transaction if it is not withdrawn ("Irrevocable Undertakings"). Of these, Irrevocable Undertakings representing approximately 24.5 million shares (22.4%) remain binding in the event of a higher competing offer from Red Back or any other third party, and Irrevocable Undertakings representing approximately 15.0 million shares (13.7%) may be terminated in the event of a higher competing offer in excess of C$5.25 per Moto share.
Support from the Government of the Democratic Republic of the Congo
Randgold has received formal written support for the Proposed Randgold Transaction from the Government of the Democratic Republic of the Congo which recognises significant merits in Randgold as operator of the Moto Gold Project.
Current Status
Subject to the fulfilment of the conditions described above, Randgold intends to proceed with the Proposed Randgold Transaction. However, shareholders are reminded that while Randgold has approached Moto about entering into the Proposed Randgold Transaction, to date, due to the restrictions imposed by the Red Back Agreement, there have been no negotiations with Moto, and to Randgold's knowledge the Red Back Agreement remains in full force and effect. There can be no assurance that the parties will enter into a definitive arrangement agreement for the Proposed Randgold Transaction, that the Proposed Randgold Transaction will be implemented, or that any other transaction will be entered into with Moto. Consequently, holders of Randgold and Moto securities are advised to continue to exercise caution when dealing in relevant securities until a further announcement is made.
This release is for informational purposes only and it is not intended to be proxy solicitation materials and it does not constitute an offer to sell or a solicitation of an offer to buy securities of Randgold, Moto or AngloGold."
Randgold's news release also contained a cautionary note regarding forward-looking statements. It is recommended that readers refer to Randgold's news release for this information.
For further information in respect of Moto's activities, please contact:
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Andrew Dinning |
Mark Arnesen |
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President and Chief Operating Officer |
Financial Director and Chief Financial Officer |
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Tel: +61 8 9273 4222 |
Tel: +61 8 9273 4222 |
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email: [email protected] |
email: [email protected] |
Moto Goldmines Limited website: www.motogoldmines.com
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Nominated advisor for the purposes of AIM: |
RFC Corporate Finance Ltd Steve Allen Tel: +61 8 9480 2508 email: [email protected] |
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AIM Broker |
GMP Securities Europe LLP James Cassley Tel: +44 207 647 2803 email: [email protected] |
Related Shares:
Randgold Resources