How Glencore’s bid for Teck Resources shows the limits of the ESG investing thesis – by Gabriel Friedman (Financial Post – April 6, 2023)

Teck-Glencore clash represents contrast in strategies for confronting energy transition

Teck Resources Ltd. had a novel rationale for rejecting Glencore Plc‘s US$23-billion takeover proposal this week: the Vancouver-based miner said the Swiss commodities giant was too dirty and Teck’s leaders didn’t want Glencore’s commitment to fossil fuels rubbing off on the long-term value of the company.

As chief executive Jonathan Price put it in a press release, Glencore’s thermal coal assets and oil trading would “negatively impact the value potential of Teck’s business.”

Price has said repeatedly that Teck can only realize its full potential by separating its coal and copper assets, and shareholders will vote later this month on a plan to cleave its metallurgical coal assets into a separate entity.

By contrast, Glencore’s proposal offers Teck shareholders an immediate 20 per cent premium. That kind of opportunity would normally spur at least a debate, but not at Teck. Most analysts noted that Teck’s board was able to reject the proposal immediately because its dual class share structure endows class A shares with 100 votes apiece, giving a few key shareholders — namely, the Keevil family — sway over the company’s strategy.

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