- Shares of Teck Resources Ltd. (TSX:TECK.A) continue to rally after more news came down the wire that played to its favour.
- Teck’s board of directors has reviewed and unanimously rejected a revised unsolicited acquisition proposal from Glencore plc
- Teck stock jumped 2.25 cents, or 2.41 per cent to C$94.76, after a report stated its biggest shareholder China Investment Corp (CIC) backed Glencore’s takeover offer
- Teck Resources opened trading at C$94.79 per share
Shares of Teck Resources Ltd. (TSX:TECK.A) continue to rally after more news came down the wire that played to its favour.
The copper miner’s stock jumped 2.25 cents, or 2.41 per cent to C$94.76, after a report stated its biggest shareholder China Investment Corp (CIC) backed Glencore’s takeover offer, which could allow investors to exit their coal exposure for cash.
Earlier this week, its board of directors has reviewed and unanimously rejected a revised unsolicited acquisition proposal from Glencore plc, which would see that company acquire Teck.
Teck’s board determined that the revised proposal is not in the best interests of Teck or its shareholders. The board and management team remain confident that its planned separation would create more value-enhancing opportunities for both Teck Metals and Elk Valley Resources (EVR).
“Glencore has made two opportunistic and unrealistic proposals that would transfer significant value to Glencore at the expense of Teck shareholders,” said Teck’s Board Chair, Sheila Murray. “Teck’s proposed separation creates a significantly greater spectrum of opportunities to maximize value for Teck shareholders. The Special Committee and Board continue to recommend that shareholders vote for the proposed separation into Teck Metals and EVR as the best pathway to fully realize the greatest value.”
“Glencore recognizes that post-separation it would be exposed to significantly greater competition from other parties, which is why it is trying to frustrate Teck’s separation process,” Teck’s CEO, Jonathan Price, added. “The fundamental flaws of Glencore’s revised proposal continue to make it a non-starter. It does not address major inherent risks including substantial regulatory hurdles, jurisdictional and ESG concerns, and diluting the base metals business with significant oil trading.”
On Friday, Teck provided a news update on its separation plan, which it intends to provide Teck Metals with continued access to steelmaking coal cash flows for a transition period, through ownership of preferred shares in the capital of EVR and a royalty. Teck changed the separation proposal, reducing the minimum term of the royalty paid by EVR to Teck Metals from five and a half years to three years, providing a potentially shorter path to full separation.
Teck Resources is a diversified miner with coal, copper, and zinc operations in Canada, the United States, Chile, and Peru. Metallurgical coal is Teck’s primary commodity in terms of EBITDA contribution, closely followed by copper, with zinc contributing a smaller amount to earnings. Teck ranks as the world’s second-largest exporter of seaborne metallurgical coal and is a top-three zinc miner.
