Lonmin rules out Ashanti merger

ACCRA, Aug 27 (Reuters) - South African platinum miner Lonmin Plc on Monday ruled out a merger with Ashanti Goldfields, but said it was in no hurry to sell its 32 percent stake in the gold miner.

In an interview with Reuters, Lonmin Chairman Sir John Craven said he was in Ghana for talks with the government, which owns about 20 percent of Ashanti.

After meeting Craven, Ghanian President John Kufuor pledged no political interference in the company's management.

The government holds a ``golden share'' in Ashanti of no monetary value, which analysts say helped it scupper a merger deal with Lonmin in 1999.

``We've come to compare notes and offer support and commitment to the company,'' Craven said.

Asked what Lonmin's response would be if it were presented with the option of a merger, Craven said: ``We would say no, because it doesn't fit into our current corporate strategy.''

Nearly two years ago, Lonmin and Ashanti came close to a merger at a time when Ashanti was close to collapse after a sudden spike in the price of gold sank its hedge book.

But Lonmin, Ashanti's largest single shareholder, withdrew its $7-a-share offer in November 1999 because of opposition by the government of former President Jerry Raw???own in January this year.

Ashanti said on Monday it was the government's stated opposition and not the golden share that prevented the merger.

Ashanti's Chief Executive Sam Jonah said this year he believed the government's veto powe Go???ysts have long said Ashanti's shares,???erform as long as the government maintained the golden share.

``We've moved on. Eighteen months ago, it (Ashanti) fit into our vision. It would have been tremendously value-creating for everyone. But when circumstances change, one changes one's mind,'' Craven said.

He reiterated that Lonmin was looking to sell its stake when the time was right, adding Ashanti's shares were currently ``terribly undervalued.''

``We are a financially robust company; we have no corporate debt, we have substantial liquid cash -- 432 million U.S. dollars -- on our balance sheet. So we are under no pressure to dispose of our interest in Ashanti,'' he said.

``We'll seek to exit at a time and manner that will find favour with our shareholders and the government of Ghana. We have no interest in walking away prematurely.''

Ghana plans to raise $200 million from the sale of state assets by 2004, but Kufuor's government has said it was not selling its Ashanti stake now because the share price was not attractive.

Finance Minister Yaw Osafo-Maafo also said last week he saw no reason why the government should consider giving up its golden share.

But Kufuor said on Monday his administration would remain ``open-minded'' about Ashanti.

``We are not going to permit any political interference in the affairs of the company at all,'' he told reporters after talks with Craven and Lonmin's Chief Executive Edward Haslam.