Glencore Plc has proposed adding a cash element to its previous all-share offer for Teck Resources Ltd., stepping up its pursuit after the Canadian miner rejected an earlier proposal to buy the company and then spin off both their coal businesses.
Glencore is proposing a deal that would give Teck investors 24 per cent of the combined metals-focused business, plus US$8.2 billion in cash. The new offer would mean that Teck investors could avoid exposure to Glencore’s thermal coal business, which the Canadian firm has said is less attractive than its steelmaking coal assets.
So far Teck has refused to engage with Glencore, calling its previous proposal a “departure from reality,” while Teck’s controlling shareholder, Norman Keevil, indicated he will not sell to Glencore at any price. Instead, the miner is urging investors to approve an earlier plan to split its metals and coal businesses.
The vote on that plan has been scheduled for April 26, giving both Teck and Glencore a tight window to win over investors. Teck’s dual-class share structure means any takeover bid would need the support of the Keevil family, but the company’s current restructuring plan also requires two-thirds approval from the holders of regular class B shares.
Glencore’s proposal, if successful, would give the company control of Teck’s lucrative copper mines — adding exposure to a critical building block for the green energy transition, while also providing a roadmap for the larger company to exit thermal coal much sooner than it had previously telegraphed.
The biggest miners have been grappling for years over what to do with their coal mines — most have already retreated, while Glencore has held its ground on a plan to operate the mines until they are depleted by 2050. Teck said last week it spent four years deciding what to do with its steelmaking coal business.
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