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Shares of Teck Resources are on fire, and that is a sure sign that hedge funds and other arbitrageurs are building stakes in what could be an epic battle for control of the last Canadian diversified mining company of any size. If their stakes are big enough, they could influence – even determine – Teck’s future ownership.
Teck shares have rallied about $10 since the start of April, taking them to $65 and giving the company a heady market value of almost $34-billion. While no hedgie has declared it is playing the Teck game, the steady price increases and trading volumes of as much as seven million shares a day suggest they are.
We can guess who they might be. Among the usual suspects are Carl Icahn – at 87, he still enjoys a good takeover fight – and John Paulson, who made billions betting against the U.S. subprime mortgage market during the 2007-08 financial crisis.
Some of them are infamous for launching campaigns against corporate boards, as Mr. Icahn is. There may be many smaller players, all hoping for an easy kill, even if they are aware that their bets could go against them.
For the rest of this column: https://www.theglobeandmail.com/business/commentary/article-teck-resources-deal-hedge-funds/