Glencore (LON: GLEN) is stepping up efforts to take over Teck Resources (TSX: TECK.A, TECK.B)(NYSE: TECK) by adding on Tuesday a $8.2-billion cash component to its original $23 billion bid for Canada’s largest diversified miner.
The revised proposal gives Teck’s shareholders the option to receive cash instead of exposure to the companies’ combined coal portfolio, plus 24% of the combined metals-focused business. The Swiss miner and commodities trader’s original all-stock deal was to acquire Teck and then separate itself into two companies, with one unit holding assets in thermal and metallurgical coal, as well as oil, and the other containing its base-metals portfolio.
The Vancouver-based miner had said Glencore’s original bid was structurally flawed, branding it as “a complete non-starter.” It noted on Tuesday that the revised proposal neither provided an increase in the overall value to be received by Teck shareholders, nor appeared to address the material risks previously raised.
Glencore said the fresh offer would effectively buy Teck’s shareholders out of their coal exposure. It acknowledged that certain investors may prefer a full coal exit while others may just want to cut their thermal coal exposure.
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