Gold council''s bullion fund stalled by tax and accounting issues

By Arindam Nag

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NEW YORK, Aug. 7 (Reuters) -- A bidding war could break
out in the gold mining industry with Randgold Resources Ltd.
preparing a rival bid for Ghana's Ashanti Goldfields Co. Ltd.,
which already has an offer from AngloGold Ltd, sources
familiar with the matter said on Thursday.

AngloGold has made a $1.1 billion all-share offer to buy
Ashanti in a deal that would pitchfork the combined company
in a position that would challenge the supremacy of the
world's No. 1 gold miner, Newmont Mining Corp.

Randgold is expected to launch the bid as early as next week
and has been encouraged by the Ghanaian government to do
so. The government has been keen to see more rival bids
come forward for Ashanti, sources close to the situation
said.

Both Randgold and AngloGold declined to comment, and
Ashanti could not be immediately reached.

The government, owner of a 17 percent stake in Ashanti,
has the power to veto any acquisition of the gold miner
and is understood to be not happy with the $8.36 per share
AngloGold has offered.

Ashanti's American Depository Receipts closed at $8.18
on the the New York Stock Exchange on Thursday.

So far, Randgold is the only other serious bidder that has
been examining Ashanti's books, the sources said.

London-listed platinum miner Lonmin Plc owns a 32
percent stake in Ashanti and has already agreed to
AngloGold's offer. But if a rival offer from Randgold comes
in, Lonmin is expected to ask for cash, as Lonmin is a
stronger company than Randgold, a source familiar with
Lonmin's thinking said.

Any deal between Randgold and Ashanti may have to be
structured in the form of a reverse takeover since Randgold
is around half the size of Ashanti, one analyst, who
declined to be named, said. The company's shareholder
equity is arond $140 million. The company, however, has no
debt.

Randgold also may face some regulatory hurdles as its
parent company Randgold amp; Exploration will have to seek
approval from the South African Reserve Bank if it has to
reduce stake in Randgold Resources.

AngloGold will also have to be paid a termination fee of
$15 million if the its bid does not go through.

If Randgold launches a bid for the Ashanti, this will be
second time in a year that the shrinking gold mining
industry will face another bid battle. Last year Newmont
and AngloGold fought each other tooth and nail before
Newmont gained control of Australia's Normandy Mining.