- Swiss multinational Glencore Tuesday, added a cash component to its existing bid to buy Teck Resources (TECK.A)
- Glencore also urged the Vancouver-based company to postpone a shareholder vote on restructuring
- The revised proposal released Tuesday would add a $8.2 billion cash component to the deal
- The cash element would in essence buy Teck shareholders out of their coal exposure, rather than forcing them to take ownership of a fossil fuel
- Teck Resources (TSX:TECK.A) is up 1.61 percent, trading at $58.69 at 10:19 am ET
Swiss multinational Glencore Tuesday, added a cash component to its existing bid to buy Teck Resources (TECK.A), urging the Vancouver-based company to postpone a shareholder vote on restructuring.
Teck’s board of directors rejected the initial unsolicited merger bid earlier in April, from the privately-owned Swiss oil and gas producer. Glencore’s oil and gas operations are headed up in London.
At the time, Teck Resources said it is not contemplating a sale of the company and instead put a vote on potential restructuring to its shareholders.
Tuesday’s message from Glencore urged Teck to postpone the vote.
The revised proposal released Tuesday would add a $8.2 billion cash component to the deal.
The cash element would in essence buy Teck shareholders out of their coal exposure, rather than forcing them to take ownership of a fossil fuel, which may undesirable to some investors.
“Glencore acknowledges that certain Teck investors may prefer a full coal exit and others may not desire thermal coal exposure,” the company said in a Tuesday statement.
At the time of the original offer, Teck executives said the offer carried too high a degree of execution and timing risk, among other concerns.
Glencore attempted to assuage those issues Tuesday.
“We believe that the majority of the issues that you have identified in your letter and subsequent communications are overstated, based on incorrect assumptions and facts regarding both Glencore and the Proposed Transaction, and could easily have been addressed had the Teck Board engaged with us,” the company said in its letter to Teck’s board of directors.
“We therefore believe that there are sufficiently clear merits to the Proposed Transaction that it is worth engaging to ensure that we are able to fully explore all aspects of the Proposed Transaction and that there are no misconceptions regarding the Proposed Transaction.
“In this regard, we acknowledge that there is limited time before the vote on the Proposed Teck Separation. We believe that it is in your shareholders’ interests to engage with Glencore and we see no valid reason not to delay your shareholders meeting in respect of the Proposed Teck Separation in order to allow for discussions and due consideration of our Proposed Transaction for the benefit of all of your shareholders,” the company said Tuesday.
Teck has not responded to the newest offer.
“Glencore’s proposal is not actionable and has been unanimously rejected by Teck’s Board of Directors because: It would reduce Teck shareholders exposure to copper and introduce exposure to thermal coal and oil trading. Glencore did not present a coherent plan for its proposed coal company. There is no market for shares of a massive new thermal coal-focused company,” Teck’s board said in a statement Monday.
Teck Resources (TSX:TECK.A) is up 1.61 percent, trading at $58.69 at 10:19 am ET.
