As the battle for the future of Teck Resources heats up, so has debate over whether the mining company should remain in Canadian hands, and whether the federal government should ultimately get involved to keep it there.
Glencore Plc told shareholders in Canada’s largest diversified miner that it would sweeten its US$23 billion takeover bid – but only if they vote to reject Teck’s plans to split its base metals and coal businesses at an upcoming April 26 meeting.
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Glencore PLC is dangling the prospect of a higher takeover offer for Teck Resources Ltd., and possibly even a tender offer, as it urges the company’s class B shareholders to reject the Canadian miner’s proposal to split itself in two when they vote next week.
Glencore of Switzerland earlier this month offered to buy Vancouver-based Teck at a 22-per-cent premium to its market value in a stock-and-cash deal worth roughly US$22.5-billion. The board of Vancouver-based Teck, its management and its controlling class A shareholders have repeatedly rejected Glencore’s advances, saying a takeover would be ruinous to shareholder value.
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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.
Billionaire Robert Friedland has become the latest prominent figure in the Canadian mining industry to come out in defence of Teck Resources (TSX: TECK.A, TECK.B) (NYSE: TECK), which is facing a hostile $23.1bn takeover bid from Swiss commodities giant Glencore (LON: GEN).
The mining veteran, who has a stake in Teck through his company Ivanhoe Mines (TSX: IVN), warned late on Monday through a series of tweets that investors should not take lightly the attempted takeover of a Canadian “champion.”
CALGARY – The hostile takeover of Canada’s largest diversified mining company by a foreign entity would weaken this country’s chances of becoming a leader in critical minerals, according to industry watchers.
Critics of the recent unsolicited proposal by Swiss commodities giant Glencore to buy Vancouver-based mining company Teck Resources Ltd. say such a transaction would mean a “hollowing out” of Canada’s mining industry at a time when the sector could be poised for a boom.
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Teck Resources Ltd. chief executive officer Jonathan Price expressed confidence its biggest B-shareholder, China Investment Corp. (CIC), will vote for the Canadian miner’s proposed split and not back Glencore’s hostile takeover proposal, as he battles to correct misinformation that has seeped into the market.
Mr. Price disputed a Bloomberg news article on Friday that cited unnamed sources who claimed CIC was leaning toward voting down Teck’s split. The article, which did not carry a byline, also claimed that Glencore executives had already spoken with CIC executives about the matter.
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Ivan Glasenberg was known as the great white shark of global resources industry when he was running Glencore, the world’s biggest commodities trader and one of the biggest mining companies. He never shied away from tough, even seemingly impossible, takeover battles and won more than he lost.
Take the epic fist fight in 2005 and 2006 for Canada’s premier nickel mining companies, Falconbridge and Inco. At the time, Glencore was private but owned 40 per cent of Xstrata, which in effect operated as Glencore’s listed machine for mergers and acquisitions. (In 2011, Glencore joined the London Stock Exchange and bought all of Xstrata two years later.)
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Teck shortens coal exit timeline as fossil fuel exposure dominates merger talks
Teck Resources Ltd. offered shareholders an earlier exit from exposure to the company’s coal business, as the issue of turning Teck into a greener miner takes centre stage in the takeover battle between the company’s management and Swiss commodities giant Glencore Plc.
In February, Teck announced a plan to separate its copper and coal assets by dividing itself into two publicly listed entities: Teck Metals and Elk Valley Resources (EVR). Shareholders are set to vote on the proposal later this month.
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After more than 170 incidents of stolen copper in the past 15 months, $3-million in damage and hundreds of hours of lost service, BCE Inc.’s Bell Canada has filed a lawsuit against an Ontario man accused of copper theft and asked the government to help it crack down on vandals.
The number of thefts of copper equipment has been rising for months and they are particularly frequent in New Brunswick, Ontario and Northern Quebec, Bell said in a news release. Copper wiring, a legacy technology which mainly carries landline services, can be sold illegally for high prices at scrap markets.
The deal shows how much demand for green metals is heating up
Hudbay Minerals Inc. says it will acquire Copper Mountain Mining Co., whose mine in British Columbia cut its output nearly in half last year after a series of challenges.Toronto-based Hudbay’s all-stock deal offers a 23-per-cent premium to Copper Mountain’s 10-day weighted average trading price, and values the company at US$439 million.
It will require approval from two-thirds of Copper Mountain shareholders and a simple majority of Hudbay shareholders, and is expected to close around the middle of 2023.
SANTIAGO, April 14 (Reuters) – Lundin Mining Corp’s (LUN.TO) bid for control of Chile’s Caserones copper mine comes despite ongoing uncertainty over potential policy changes to royalties and taxes, an indication that investors may be regaining confidence in the world no.1 copper-producing country.
Lundin last month agreed to pay $950 million for 51% control of the mine, calling the deal “an endorsement that we believe the mining royalty and taxation discussions are trending in the right direction.”
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Teck Resources Ltd. chief executive officer Jonathan Price played down any notion of its metals business being quickly acquired by a big foreign multinational after a planned split of the company, as the Canadian miner rejected Glencore PLC’s latest hostile takeover offer.
Vancouver-based Teck said earlier this year that it plans to separate into Elk Valley Resources, containing its metallurgical coal assets, and Teck Metals, holding its copper and zinc mines.
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.
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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
says.
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.
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.
