12th Jun 2023 08:16
(Alliance News) - Glencore PLC on Monday confirmed recent press reports that it submitted a cash takeover proposal for Teck Resources Ltd's steel-making coal business.
The Barr, Switzerland-based miner and commodity trader said it has made the proposal as it is expected to allow for a value-accretive demerger of the combined coal and carbon steel materials business to its shareholders.
If the acquisition were to materialise, Glencore would demerge its combined coal and carbon steel materials business once it has "sufficiently" de-levered. This would take about 12 to 24 months from close.
"Glencore is fully committed to ensuring that the proposed [Teck steelmaking coal business] acquisition would benefit Canada and is open to working with Teck to identify a comprehensive suite of commitments for the benefit of all relevant stakeholders which would, amongst others, maintain and, where feasible, enhance [Teck's steelmaking coal business]'s existing presence and capital investments in Canada," it said on Monday.
There is no certainty that any transaction will occur, Glencore added.
Glencore's attempts to acquire New York-listed Teck have been rebuffed so far. Teck instead has wanted to pursue its own separations plans, though last month it pulled a shareholder vote on them, after receiving investor feedback.
Glencore's coal exposure has been a hang-up for some Teck investors. Glencore in April then added a cash portion to its takeover tilt, in a bid to get a deal over the line while soothing investor concerns about coal.
In April, Glencore revised its offer for Teck, adding a cash element of USD8.2 billion plus a 24% stake in MetalsCo to the 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.
Glencore had originally 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 succeeded, Glencore shareholders would have owned 76% of the merged entity, with Teck shareholders owning the remaining 24%.
Teck has so far resisted Glencore's takeover attempts and backed its own restructuring plan. Shareholders would have had the chance to vote on its plan late last month, but Teck withdrew the proposal.
Glencore shares were 0.6% lower at 432.55 pence each on Monday morning in London, while unchanged at ZAR102.52 each in Johannesburg.
Teck B shares lost 3.3% to USD41.10 in the New York after-market session on Friday.
By Sophie Rose, Alliance News reporter
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