OPINION: Will Glencore Go from Predator to Prey in Mining M&A? – by Javier Blas (Bloomberg News – April 6, 2023)

https://www.bloomberg.com/

With its offer to buy Teck, the world’s largest commodity trader may have also hung out a “for sale” sign visible to its only potential acquirer: BHP

Teck Resources Ltd.’s rejection of Glencore Plc’s $23 billion takeover bid was hardly the end of their dealmaking story. It was closer to the end of the beginning. In the next chapter’s plot twist, the buyer could very well become a seller in a transaction that reshapes the global mining industry.

By proposing to Teck that they spin off their coal assets and sell noncore businesses, Glencore’s decisionmakers knew they were doing more than configuring a new commodities giant. Unwittingly or not, they were also putting the “for sale” sign above their own company — a placard visible to the only company that has the potential interest and means to acquire them: BHP Group Ltd.

For now, Glencore, the world’s largest commodity trader and a huge miner of coal, copper and other base metals key for the energy transition, is still pursuing Teck. But the clock is ticking. Glencore has less than three weeks to convince a third of Teck’s shareholders to vote down a plan to split the Canadian miner before a special shareholder meeting on April 26.

Due to the dual class of shares at Teck, if the split goes ahead, Glencore’s takeover bid would be effectively dead.What would it take for Teck’s shareholders to revolt against the board’s recommendation to reject Glencore? More money — a lot more. Glencore is offering an all-share deal with a 22% premium.

For the rest of this column: https://www.bloomberg.com/opinion/articles/2023-04-06/will-glencore-go-from-teck-s-predator-to-bhp-s-prey-in-mining-m-a?srnd=opinion