|
Glencore PLC said on Wednesday the board of Teck Resources Ltd has refused any engagement on its proposed ‘merger’ with the New York-listed mining group, hinting it may improve the offer. In a dramatic move, the Anglo-Swiss miner and commodities trader published an open letter to Teck shareholders, urging them take action to support engagement on its proposal. Last week, Glencore revised its offer, adding a cash element of $8.2 billion plus a 24% stake in MetalsCo to Vancouver-based miner’s shareholders. MetalsCo would be a transition metals focused business. It would differ from CoalCo, which would be a standalone coal unit. Teck shareholders could opt for CoalCo shares instead of the cash and would own up to 24% of it if all did. ‘Glencore acknowledges that certain Teck investors may prefer a full coal exit and others may not desire thermal coal exposure,’ it said on Wednesday. Glencore wants to buy Teck and then separate it to create two businesses, MetalsCo and CoalCo. Early this month, Glencore had offered 7.78 of its own shares for each Teck Class B subordinate voting share, and 12.73 shares for each Teck Class A common share. This represented a 20% premium for both on the date of the offer. If the deal succeeds, Glencore would have owned 76% of the merged entity, with Teck owning the remaining 24%. Teck’s board had unanimously rejected an ‘unsolicited and opportunistic’ acquisition proposal from Glencore. Teck had said that the offer was inferior to its own planned separation, which it said better positioned the resulting companies, Teck Metals and Elk Valley Resources, for success. In the letter, Glencore urged Teck shareholders to take action to ensure that the Teck board engaged in bona fide negotiations regarding the proposed takeover it says creates ‘meaningful value creation’ for them. ‘Glencore is prepared to meet anytime and anywhere that is suitable for the Teck board and/or its management team to explore our proposal,’ the letter said. Glencore said it had never stated that its proposal was ‘best and final’ and that it was not willing to make changes and improvement to its proposal. ‘Glencore believes that any such improvements are best considered following engagement by the Teck board which would allow the parties to jointly explore ways that Glencore could alter its proposal to address any issues raised by Teck management or Teck’s board,’ the letter explained. ‘In fact, we believe that with engagement, we could improve our proposal’s terms and value, which would be in the best interests of all Teck shareholders,’ it said. Glencore also affirmed that its proposal will stand and remain valid if Teck delays its shareholders’ meeting or Teck shareholders vote down the proposed Teck separation on Wednesday next week. ‘Glencore is willing to make an offer directly to Teck shareholders if the proposed Teck separation does not proceed and Glencore believes that this is required where there continues to be no engagement from the Teck board,’ the letter said. Glencore shares were down 0.4% to 496.28 pence each on Wednesday morning in London. It has a market capitalisation of £62.90 billion. In Johannesburg, however, the stock was up 0.2% at R 112.62. Teck Resources shares were up 0.6% to $48.10 in the New York pre-market on Wednesday. It has a market cap of $24.95 billion. Copyright 2023 Alliance News Ltd. All Rights Reserved.
|
