Receipt of Offer from Randgold Resources


 

TIDMMOE TIDMRRS TIDMAGD 
 
RNS Number : 8447V 
Moto Goldmines Limited 
17 July 2009 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
"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: 
 
 
+-----------------------------------------+--------------------------------------+ 
| Andrew Dinning                          | Mark Arnesen                         | 
+-----------------------------------------+--------------------------------------+ 
| President and Chief Operating Officer   | Financial Director and Chief         | 
|                                         | Financial Officer                    | 
+-----------------------------------------+--------------------------------------+ 
| Tel: +61 8 9273 4222                    | Tel: +61 8 9273 4222                 | 
+-----------------------------------------+--------------------------------------+ 
| email: adinning@motogoldmines.com       | email: marnesen@motogoldmines.com    | 
+-----------------------------------------+--------------------------------------+ 
Moto Goldmines Limited website: www.motogoldmines.com 
+-----------------------------------------+--------------------------------------+ 
| Nominated advisor for the purposes of   | RFC Corporate Finance Ltd            | 
| AIM:                                    | Steve Allen                          | 
|                                         | Tel: +61 8 9480 2508                 | 
|                                         | email: Steve.Allen@rfc.com.au        | 
+-----------------------------------------+--------------------------------------+ 
| AIM Broker                              | GMP Securities Europe LLP            | 
|                                         | James Cassley                        | 
|                                         | Tel: +44 207 647 2803                | 
|                                         | email: james.cassley@gmpeurope.com   | 
+-----------------------------------------+--------------------------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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