Teck Resources Looks Entice Shareholders with Earlier Separation

By Adriano Marchese

Teck Resources Ltd. will look to speed up the separation of its business as Swiss-based commodities company Glencore PLC continues its bid to take over the company.

The Canadian natural resources company said Thursday that it will make changes to its transaction terms to allow for an earlier full separation of Teck Metals Corp. and Elk Valley Resources Ltd.

Glencore has been vying to win shareholder favor when earlier in the week it said it would add a cash component to its roughly $23 billion unsolicited merger proposal for Teck Resources, offering Teck shareholders 24% of MetalsCo and $8.2 billion in cash.

Teck's board unanimously rejected Glencore's bid, backing yet again the plan to separate on the grounds that it creates a greater spectrum of value-enhancing opportunities through its new entities, Teck Metals and Elk Valley Resources.

To sweeten the deal for shareholders, Teck said it is making changes to its separation proposal that would include reducing the minimum term of the royalty paid by Elk Valley Resources to Teck Metals to about three years instead of five and a half years.

It also said it would put in place certain measures to limit annual capital spending by Elk Valley at $1.3 billion, which Teck said would strengthen the alignment between the two new entities.

Shareholders will have to approve the separation by shareholders on April 26.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

April 13, 2023 09:15 ET (13:15 GMT)

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