The rebuttal follows Monday's announcement by Ashanti that it had managed to secure a three-year breathing space on margin calls from its 15 hedge book counterparties.
"Lonmin has ... been informed by Ashanti that its board is unable to accept its improved proposal, which has accordingly been withdrawn," Lonmin said after the markets closed. "The board ... remains open to the resumption of merger discussions with both Ashanti and the government of Ghana."
Ashanti, 20 per cent held by the Accra government, ran into a liquidity crisis when the surge in bullion prices catapulted its hedge book into the red. Lonmin, which holds 32 per cent of Ashanti, stepped in with an initial bid on 10 October after an invitation from Ashanti executives. Its offer was revised on 24 October, again at the request of the company's management.
Lonmin said its second proposal, which valued Ashanti at about $670m, contained several elements of the counterparty deal announced earlier this week. Ashanti executives were unavailable for comment last night. Lonmin shares yesterday added 2.5p to 620p.