Glencore says Teck’s spun-off Canadian coal company would be a sitting duck for a foreign takeover – by Eric Reguly and Niall McGee (Globe and Mail – April 12, 2023)

The pure coal company that Vancouver’s Teck Resources Ltd. plans to create will likely land in the hands of predatory foreign investors, delivering a blow to Teck’s efforts to keep those assets under full Canadian control, the chief executive officer of Switzerland’s Glencore PLC GLNCY +2.22%increase

In an exclusive interview with The Globe and Mail on Tuesday, Gary Nagle said he is aware of several investors who are eyeing Elk Valley Resources, the coal company that Teck plans to form through a spinoff, all of them foreign.

“There is a strong possibility that someone in the coal industry will acquire Elk Valley on the cheap,” he said, referring to Glencore’s belief that the company would trade at a low value because it would pay most of its cash flow to Teck Metals, as the new coal-free Teck would be called. “There is a high risk that Teck Metals would not see all the cash flow payments from Elk Valley as the new owners would find ways around this by being opportunistic.”

Mr. Nagle’s comments came as Glencore’s takeover battle for Teck turned nasty, with Teck on Monday highlighting the more than US$1-billion in penalties paid last year by the Swiss commodities giant to the U.S. Department of Justice and various other regulatory authorities to settle bribery and market manipulations investigations. Senior insiders at Teck and Glencore said it appeared that both companies were now on the “warpath.”

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