Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK)
(“Teck”) today announced that its Board of Directors has reviewed
and unanimously rejected a revised unsolicited acquisition proposal
from Glencore plc, received on April 11, 2023, which would see that
company acquire Teck.
Consistent with its fiduciary duties and in consultation with
its financial and legal advisors, Teck’s Board of Directors (the
“Board”) conducted a detailed review and assessment of the revised
unsolicited proposal and, on the recommendation of the independent
Special Committee of the Board, determined that the revised
proposal is not in the best interests of Teck or its shareholders.
The Teck Board and management team remain fully confident that
Teck’s planned separation creates a greater spectrum of value
enhancing opportunities for both Teck Metals and Elk Valley
Resources (“EVR”).
“Glencore has made two opportunistic and unrealistic proposals
that would transfer significant value to Glencore at the expense of
Teck shareholders,” said Sheila Murray, Chair of the Board, Teck.
“Teck’s proposed separation creates a significantly greater
spectrum of opportunities to maximize value for Teck shareholders.
The Special Committee and Board continue to recommend that
shareholders vote for the proposed separation into Teck Metals and
EVR as the best pathway to fully realize the greatest value.”
“Glencore recognizes that post-separation it would be exposed to
significantly greater competition from other parties, which is why
it is trying to frustrate Teck’s separation process,” said Jonathan
Price, CEO, Teck. “The fundamental flaws of Glencore’s revised
proposal continue to make it a non-starter. It does not address
major inherent risks including substantial regulatory hurdles,
jurisdictional and ESG concerns, and diluting the base metals
business with significant oil trading.”
“Now, pre-separation, is not the time to explore a transaction
of this nature,” said Dr. Norman Keevil, Chairman Emeritus, Teck.
“I have the utmost confidence in the Board’s and our management
teams’ strategy to maximize value for each of Teck Metals’ and
EVR’s shareholders after the separation.”
In reaching the decision to reject Glencore’s revised proposal,
Teck’s independent Special Committee and Board identified key
factors, including:
- Destruction of value:
- Eliminates the ability of Teck to explore a greater spectrum of
opportunities to maximize value post separation, with the benefit
of greater competition from a wider range of potential
parties.
- Removes Teck shareholders’ choice to remain invested in a
leading, pure-play steelmaking coal business.
- Does not address material risks:
- Exposes shareholders to significant jurisdictional risk.
- Contaminates metals with one of the world’s largest oil trading
businesses.
- Poor ESG track record and unresolved investigations.
- Significant execution risks and uncertainty:
- Regulatory uncertainty that could take up to 24 months to
resolve, if at all during which time the value of the transaction
to Teck shareholders would be at significant risk to factors beyond
Teck’s control.
- Value uncertainty of Glencore’s stock during this protracted
regulatory period.
- No clear plan by Glencore to exit coal; Teck shareholders could
remain exposed to thermal coal for an uncertain period of
time.
- No increase in value: The revised proposal
does not increase the overall total value to Teck
shareholders.
In contrast, Teck’s pending separation provides shareholders
with a greater set of options to maximize value. The separation
minimizes execution risk, provides a path to fulfill the full
potential of Teck Metals, realizes significant value for the
high-quality steelmaking coal assets of EVR and does not foreclose
future opportunities for other value enhancing transactions.
Teck’s Board of Directors continues to unanimously recommend
that shareholders approve the previously announced reorganization
of Teck’s business and proposal to introduce a six-year sunset for
the multiple voting rights attached to the Class A common shares of
Teck, among other items of business, at the annual and special
meeting of shareholders on April 26, 2023.
Teck communicated its response to Glencore in a letter dated
today.
To view the management proxy circular providing more information
on these proposals click here. For instructions on voting for Teck
shareholders, go to www.teckagsm.com.
AdvisorsBarclays Capital Canada Inc. and Ardea
Partners LP are serving as financial advisors to Teck. Stikeman
Elliott LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP
are acting as legal advisors.
BMO Capital Markets, Goldman Sachs & Co. LLC, and Origin
Merchant Partners are serving as financial advisors to the Special
Committee and Blake, Cassels & Graydon LLP and Sullivan &
Cromwell LLP are acting as legal advisors to the Special
Committee.
About TeckAs one of Canada’s leading mining
companies, Teck is committed to responsible mining and mineral
development with major business units focused on copper, zinc, and
steelmaking coal. Copper, zinc and high-quality steelmaking coal
are required for the transition to a low-carbon world.
Headquartered in Vancouver, Canada, Teck’s shares are listed on the
Toronto Stock Exchange under the symbols TECK.A and TECK.B and the
New York Stock Exchange under the symbol TECK. Learn more about
Teck at www.teck.com or follow @TeckResources.
Forward-Looking StatementsThis news release
contains certain information which constitutes “forward-looking
statements” and “forward-looking information” within the meaning of
applicable Canadian securities laws. Any statements that are
contained in this news release that are not statements of
historical fact may be deemed to be forward-looking statements.
Forward-looking statements are often identified by terms such as
“may”, “should”, “anticipate”, “expect”, “potential”, “believe”,
“intend” or the negative of these terms and similar expressions.
Forward-looking statements in this news release include, but are
not limited to: statements regarding Teck’s planned separation
transaction, including the timing thereof, and Teck’s expectations
regarding the impacts of any such transaction in terms of creating
value for shareholders; statements related to anticipated risks of
Glencore’s proposal, including with respect to execution, timing
and exposure to thermal coal and oil trading, and Teck’s assessment
thereof as compared to its own planned separation transaction;
statements related to the opportunity for future transactions
involving Teck Metals or EVR; and statements with respect to Teck’s
business and assets and its strategy going forward. Readers are
cautioned not to place undue reliance on forward-looking
statements. Forward-looking statements involve known and unknown
risks and uncertainties, most of which are beyond the Teck’s
control. Several factors could cause actual results to differ
materially from those expressed in the forward-looking statements,
including, but not limited to: future actions taken by Glencore in
connection with its unsolicited proposal; fluctuations in supply
and demand in steelmaking coal, base metals and specialty metals
markets; changes in competitive pressures, including pricing
pressures; timing and receipt of requisite shareholder and court
approvals; the recent global banking crisis and conditions and
changes in credit markets; changes in capital markets; changes in
currency and exchange rates; changes in and the effects of,
government policy and regulations; and earnings, exchange rates and
the decisions of taxing authorities, all of which could affect
effective tax rates. Additional risks and uncertainties can be
found in our Annual Information Form dated February 21, 2023 under
“Risk Factors” and our management information circular in respect
of our annual and special meeting of shareholders on April 26,
2023, each filed under our profile on SEDAR (www.sedar.com) and on
EDGAR (www.sec.gov), and on Teck’s website (www.teck.com). Should
one or more of the risks or uncertainties underlying these
forward-looking statements materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual
results, performance or achievements could vary materially from
those expressed or implied by the forward-looking statements.
The forward-looking statements contained herein are made as of
the date of this release and, other than as required by applicable
securities laws, Teck does not assume any obligation to update or
revise them to reflect new events or circumstances. The
forward-looking statements contained in this release are expressly
qualified by this cautionary statement.
Investor Contact:Fraser PhillipsSenior Vice
President, Investor Relations & Strategic
Analysis604.699.4621fraser.phillips@teck.com
Media Contact:Chris StannellPublic Relations
Manager604.699.4368chris.stannell@teck.com
Teck Resources (TSX:TECK.A)
Historical Stock Chart
From Sep 2024 to Oct 2024
Teck Resources (TSX:TECK.A)
Historical Stock Chart
From Oct 2023 to Oct 2024