Teck shares surge above Glencore offer as other major miners eye metals unit

Bloomberg News | April 17, 2023 |  

Credit: Teck Resources Ltd.

Teck Resources Ltd. shares surged to a record Monday, exceeding Glencore Plc’s per-share takeover offer price for the first time, as other major mining companies show interest in acquiring the Canadian firm’s metals operations.


The stock gained as much at 9.2% in Toronto after Freeport-McMoRan Inc., Vale SA and Anglo American Plc were reported to be evaluating potential bids for Teck’s base metals business if the firm spins out its coal assets. Norman Keevil, the 85-year-old magnate who controls Teck through “supervoting” Class A shares, said in a Sunday statement that he’d support a transaction on the right terms after the separation.

Teck is racing to get enough investor support for the coal spinoff ahead of an April 26 vote while fending off an unsolicited $23 billion takeover offer from Glencore for the whole company. Keevil said that pursuing a deal for the entire company before separating its coal and metals businesses would rob shareholders of significant post-split value.

Teck’s stock rose 5.7% to C$63.90 at 10:36 am in Toronto, exceeding the value of Glencore’s offer of C$63.22 a share for the first time since the Swiss commodities giant proposed the deal three weeks ago.

Teck’s copper and zinc mines have long been admired by the world’s biggest miners, but Keevil’s resistance to sell has kept the company independent so far. Teck’s board has rejected two takeover proposals from Glencore this month, most recently after the company offered to add a cash component to buy Teck shareholders out of exposure to the combined coal businesses.

Glencore grabbed a momentum shift last week as Institutional Shareholder Services and Glass Lewis both recommended that investors vote against Teck’s spinoff plan and as Bloomberg News reported that China Investment Corp., which owns 10% of Teck’s Class B shares, favors Glencore’s proposal because it offers a quicker and cleaner exit from coal.

(By Joe Deaux)

The sale of Teck to a foreign buyer would be a loss for Canada, critics say

The Canadian Press

Some industry watchers say a hostile takeover of Canada's largest diversified mining company by a foreign entity would be bad news for the Canadian economy.

Swiss commodities giant Glencore is proposing to buy Vancouver-based mining company Teck Resources Ltd., an offer that Teck's board has rejected.

Some analysts say such a transaction would mean a "hollowing out" of Canada's mining industry, at a time when the mining sector could be poised for a boom.

Economist and former Scotiabank executive Patricia Mohr says she expects copper prices to skyrocket within the next few years, because copper is one of the critical metals used in the manufacturing of electric vehicles.

She says Teck is well situated to capitalize on that, with its massive new copper mine project in Chile as well as copper deposits in Canada.

Mohr and others say Teck is one of the last remaining big mining companies that is still controlled by Canadians, and losing that domestic control at this time would be a shame.

This report by The Canadian Press was first published April 17, 2023.

Teck controlling shareholder calls Glencore bid the wrong one at the wrong time

The Canadian Press

The controlling shareholder of Teck Resources Ltd. rejected Glencore's offer to buy the Canadian miner, but says he is open to talking about other possible deals once the company completes its own plan to split its business.

Teck chairman emeritus Norman Keevil says Glencore's proposal is the wrong one, at the wrong time. 

Teck's board has rejected Glencore's unsolicited takeover offer that would see shareholders receive a stake in a combined metals company as well as a choice of cash or shares in a company that would hold their merged coal assets.

Instead, the company is pursuing a plan it announced in February to split up its metal and steelmaking coal businesses into two companies, Teck Metals and Elk Valley Resources. The proposal will be voted on by shareholders later this month. 

Keevil says he would support a transaction – whether it be an operating partnership, merger, acquisition, or sale – with the right partner, on the right terms for Teck Metals after the separation takes place. 

Teck is controlled by the Keevil family, which owns the company's class A shares together with Japanese company Sumitomo. 

This report by The Canadian Press was first published April 17, 2023.

Companies in this story: (TSX:TECK.B)

Teck's biggest shareholder favours Glencore's coal plan

Bloomberg News

Teck Resources Ltd.’s biggest shareholder, China Investment Corp., currently favours Glencore Plc’s takeover plan that would allow investors to exit their coal exposure in return for cash, as the two miners race to win support for their competing proposals.

Glencore wants to buy Teck and then spin off the combined companies’ coal assets, but Teck says the deal is a “non starter” and is instead pressing ahead with an earlier plan to hive off its coal mines and focus on metals. Teck investors will decide on the Canadian miner’s split plan on April 26, in a high-stakes vote that is being framed by Glencore’s camp as a referendum on its takeover proposal.

China’s massive sovereign wealth fund owns 10 per cent of Teck’s Class B shares, putting CIC in a powerful position as Teck needs to secure two-thirds approval from both classes of shares, voting separately. While Canada’s Keevil family controls the fate of the company through “supervoting” Class A shares — and has rejected a deal with Glencore — the structure of this month’s vote means that investors with just a small percentage of total voting rights could end up scuppering Teck’s plan.

CIC currently favors Glencore’s proposal for the coal assets because it would allow for a cleaner exit for investors, according to people familiar with the matter. Glencore this week amended its earlier all-share proposal to add a cash component, offering to buy out shareholders that don’t want to keep exposure to coal.

The fund is considering a vote against Teck’s own proposal, although it has yet to make a final decision, said the people, who asked not to be identified discussing private information.

CIC may still seek a higher price from Glencore before supporting its offer, some of the people said. Senior Glencore executives have spoken with CIC executives to try and win support for its proposal.

CIC and Glencore both declined to comment. The Chinese fund initially bought a 17 per cent stake in Teck during the 2009 financial crisis, as the miner sought cash to cut its debt pile. CIC sold down some of its holding in 2017.

Teck shares rose 2.5 per cent by 9:52 a.m. in Toronto, while Glencore gained 2.4 per cent. 

Tension between the two companies escalated publicly in recent days, with less than two weeks on the clock until Teck’s shareholder vote. Glencore has said its current proposal would be dead if Teck’s investors approve the separation, while a vote against would leave the company without a clear strategy — potentially putting pressure on the board and Keevil family to engage with Glencore.

Teck on Thursday rejected Glencore’s amended proposal, and also announced changes to its own planned split by reducing the minimum term of the royalty paid to the Teck metal company, to three years from more than five earlier. However, Teck investors would still be left holding a stake in the steelmaking coal business, versus the cash exit being offered by Glencore.

Both companies are trying to win investor support. Teck Chief Executive Officer Jonathan Price and Glencore CEO Gary Nagle both held investor meetings in Toronto Thursday, with Nagle meeting or speaking with more than 100 investors.

Glencore won a significant boost Thursday when influential proxy advisory firm Institutional Shareholder Services said Teck shareholders should vote against Teck’s proposal.