(Vancouver) The majority shareholder of Teck Resources has rejected Glencore’s takeover bid for the Canadian mining company, but says it is ready to discuss other possible deals once the company completes its own spin-off plan.
Norman Keevil, chairman emeritus of Teck, believes Glencore’s offer is the wrong proposal at the wrong time.
“Many in the mining industry have their eyes on Teck and would be interested in partnering or investing in Teck Metals following the separation of its base metals and steelmaking coal businesses,” Mr. Keevil wrote in a statement. statement.
Teck’s board has rejected Glencore’s unsolicited takeover bid, which would see shareholders receive a stake in a company combining the two companies’ metals businesses, as well as a choice of cash or shares in a company that would hold their assets in the coal sector.
Instead, the company is pushing ahead with the plan it announced in February, which is to split its metals and steelmaking coal business into two companies, Teck Metals and Elk Valley Resources. The proposal will be put to a shareholder vote by the end of the month.
Mr. Keevil says he would welcome a transaction — whether it’s an operating partnership, merger, acquisition or sale — with the right partner and on the right terms for Teck Metals, once the separation is complete.
“Based on my decades of experience building a successful mining company, I believe that pursuing a sale or merger transaction now would rob our shareholders of significant post-split value,” wrote Mr. Keevil.
Teck is controlled by the Keevil family, which owns the company’s Class A shares along with Japanese company Sumitomo.
Glencore’s initial proposal consisted of an offer to purchase all of Teck’s shares, which would have been followed, among other things, by a spin-off of the two companies’ metallurgical activities and part of Glencore’s marketing activities within a single company. In addition, the coal business and other related assets would have been consolidated into another company. However, the Swiss company later revised its offer to include a cash component.
In revising its offer, Glencore has recognized that some investors in Teck may prefer a full exit from coal and others may not wish to be exposed to the thermal coal sector.
Teck called Glencore’s offer opportunistic and argued that it exposed shareholders to what it considers to be significant jurisdictional risk.
The Vancouver-based mining company said its plan would give shareholders more choice and ways to maximize their value, as they would own shares in both Teck Metals and new coal company Elk Valley Resources.