Teck approached by Vale, Anglo American and Freeport to explore deals after planned split, sources say - The Globe and Mail

Teck Resources Ltd. has been approached by Vale Ltd., Anglo American PLC and Freeport-McMoRan Inc., which are all interested in exploring transactions if a planned split of the company happens, two sources familiar with the discussions told The Globe and Mail.

Vancouver-based Teck on April 26 will hold a vote that will ask shareholders to decide on its plans to split the company into Teck Metals, which will hold its critical minerals mines, and Elk Valley Resources, which will hold its metallurgical coal mines.

Teck received the approaches from the three giant international mining companies as it attempts to fight off a hostile US$23.1-billion takeover from Glencore PLC of Switzerland, which wants to buy Teck in its standalone format.

Teck is also fending off resistance from two proxy shareholders firms, Institutional Shareholder Services (ISS) and Glass Lewis & Co., which both advised Teck shareholders to vote against the planned split, and engage more fully with Glencore.

One of the sources said that Teck had received expressions of interest from at least half a dozen major mining companies, who are interested in various transactions post-split.

The Globe and Mail granted anonymity to both sources because the discussions are private.

Teck spokesperson Dale Steeves wrote in an e-mail to The Globe that the company does not comment on market rumours or speculation.

James Wyatt-Tilby, group head, corporate communication with Anglo American declined to comment.

Vale and Freeport-McMoRan did not immediately respond to a request for comment.

Norman B. Keevil, who controls the super voting A shares, on Friday told The Globe that he would be willing to sell Teck Metals to a large foreign mining company, if the board was in favour, saying he would not be “swimming against the tide.”

Mr. Keevil and Teck’s board so far have refused to entertain any approach from Glencore, and have said the proposed Glencore acquisition of Teck would destroy shareholder value, expose Teck to significant execution risk, and harm its ESG standing.

In its rebuttal of the Glencore offer, Teck has also said that post-split, there will be far more value creation options available to shareholders than right now.

Glencore is seen as one of the few, and perhaps the only, major mining company that would be interested in buying Teck currently, because of its heavy coal exposure. But post-split, analysts have said that many mining companies will covet Teck Metals, in particular because of its growing copper portfolio. Teck’s massive QB2 copper mine in Chile, which only went into production a few weeks ago, will be the cornerstone asset of Teck Metals.

While Mr. Keevil said he would not like to see Teck Metals sold to a foreign buyer, if the board, management, and most of the B shareholders wanted it, he would not stand in their way. Mr. Keevil also told The Globe that in 50 years the Keevil family has never gone against the board’s wishes and exercised its veto power.

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2023-04-16 17:44:54Z
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