Teck’s chair says Glencore has made ‘two opportunistic and unrealistic proposals’ that would transfer value to that company’s shareholders at the expense of Teck investors
, one containing its metallurgical coal assets, and the other its copper and zinc mines. Investors gave that proposal a lukewarm reception in part because Teck’s coal business would have to give up about 90 per cent of its cash flow for about 11 years to the metals business.
Glencore suffered another setback on Thursday with a British activist fund calling for Glencore PLC to radically overhaul its proposed acquisition of Teck Resources Ltd., calling the plan to merge its thermal coal unite with Teck’s metallurgical coal a bad idea. Bluebell is convinced that Glencore’s thermal coal unit will heavily weigh on the valuation of the proposed new Glencore and Teck coal company post-merger, because of its far worse environmental image, lack of any real synergies with Teck’s metallurgical coal, and because Glencore’s thermal unit is in “rundown” mode, while Teck’s met coal still has lots of runway left.
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