Listing rules forcing us out of LSE, says Randgold boss
THE boss of Randgold Resources has blamed listing rules in the UK for forcing the gold miner to abandon the London Stock Exchange after its £18bn merger with Barrick of Canada.
Mark Bristow said restrictive rules meant the new company would have to do a “full IPO [initial public offering]” in order to retain a foothold on the LSE, threatening the viability of the deal.
“It was a requirement of listing rules in London that even though we are listed as a premium stock in London and Barrick is listed in Toronto and New York, we had to do a full IPO,” said Mr Bristow.
“That’s many months of work, which was absolutely impossible. You can’t expect two companies to remain open on a transaction for months as you try to re-IPO it.
“It begs the question why you would not encourage a company that is FTSE 100 to remain listed on your stock exchange?”
Mr Bristow suggested the LSE should look again at its rules ahead of Brexit: “There’s clearly some work still to be done, particularly when there’s a question mark over London as a continuing centre for capital.”
An industry source noted there was no bar on Barrick relisting shares in London after it absorbs Randgold, even if it cannot join the FTSE 100 because it is not incorporated in the UK.
Randgold shareholders are expected to wave through the takeover by Barrick in a vote today, despite complaints that the structure of the deal means some funds will have to sell out.
Mr Bristow, who will lead the combined company, defended the decision not to offer shareholders a cash incentive to back the all-share deal.
He noted that the share prices of Randgold and Barrick had risen since the merger was announced, while higher gold prices over the summer had enabled both companies to top up their dividends.
Randgold reported a 5pc dip year on year in pre-tax profits for the three months to Sept 30 to $92m (£70m). Revenues slipped 18pc to $243.6m. Gold output improved as Randgold overcame strike action in Ivory Coast.
One of Mr Bristow’s first jobs as Barrick chief will be to break the deadlock between Acacia, which is 64pc owned by Barrick, and the Tanzanian government over alleged unpaid taxes.
He said: “I’m very confident there’s a constructive solution to be found.”