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Vancouver-based Teck on Monday repeated its rejection of Glencore (OTC:GLNCY)’s unsolicited bid, which includes a plan to simultaneously spin off the companies’ thermal and steel-making coal businesses and rebrand the remaining group as GlenTeck.
Teck CEO Jonathan Price said a restructuring in which the miner would spin off its steel-making coal unit to focus on copper and other industrial metals was the only viable option.
Glencore is now proposing that Teck shareholders receive 24% of the combined metals group and up to $8.2 billion in cash for those who may not want exposure to thermal coal, which is the most polluting fossil fuel.
Teck, which did not immediately respond to a request for comment, had said in its rejection that it did not want to expose its shareholders to thermal coal.
Canada’s Keevil family, which has so far supported the rejection of Glencore’s bid, controls Teck through its dominant ownership of ‘A’ class of shares, which have more voting power than the numerous ‘B’ class shares held by institutions.
“We expect the Class B shareholders to view this offer favourably,” Canaccord Capital Markets analysts said.
“This new bid from Glencore raises the odds of the vote (on proposed restructuring) not going Teck’s way.”
Reuters on Monday reported that Glencore CEO Gary Nagle plans to meet with some of Teck’s Canadian shareholders in Toronto on Thursday to personally lobby them for support.
“We see no valid reason not to delay your shareholders meeting in respect of the Proposed Teck Separation in order to allow for discussions and due consideration of our Proposed Transaction,” Nagle said in its letter to Teck’s board.
A vote on Teck’s plan is scheduled for April 26. If it passes, the separation will then take 7-8 weeks to complete.
