By Jacob Lorinc.
Teck Resources urged investors to support its plan for splitting its metals and coal businesses while reiterating opposition to a $23 billion (R426 billion) takeover proposal from Glencore.
Glencore’s offer to acquire Teck and then spin off the coal businesses “is a departure from reality,” Teck Chief Executive Officer Jonathan Price said in a Monday call with investors. “There is no path to a deal with Glencore.”
Shares of Vancouver-based Teck fell 1.3% to C$58.61 at 9:41 a.m. in Toronto.
Teck, one of Canada’s biggest mining companies, is stepping up its fight to win over investors to back a plan to separate its base metals business from steelmaking coal while fending off an unsolicited proposal from Glencore. The developments come as acquisition activity heats up in the mining industry, fueled by a need for more of the metals that underpin the global energy transition.
Teck’s dual-class share structure means any takeover bid requires support of Canada’s Keevil family, whose patriarch has indicated he will not sell to Glencore at any price. However, other shareholders have an opportunity to block Teck’s plan announced in February to split the company at an April 26 vote.
With a little more than two weeks before the vote, Teck and Glencore each have a tight deadline to win over investors. Teck’s separation requires two-thirds support from both categories of “supervoting” and regular shares, meaning that shareholders with just a small percentage of the total voting rights could have the power to scupper the plan and throw its future into question.
“The choice is clear: either vote for a separation that creates two companies with a broad spectrum of opportunities to maximize value, or vote to maintain the status quo,” Price said on Monday’s call.
Price reiterated that Glencore’s proposal would give shareholders exposure to thermal coal and oil trading. He called the larger company an “unsuitable acquirer” because of the risks involved in its business.