Glencore Willing to Consider Improvements to Teck Resources Proposal -- Update
April 19 2023 - 3:29AM
Dow Jones News
By Ian Walker
Glencore PLC said Wednesday that it would be prepared to
consider improvements to its merger, demerger proposal for Teck
Resources Ltd. if its board were willing to engage with it, but
would also be willing to go directly to its shareholders if
not.
The Anglo-Swiss commodity mining and trading company said that
any improvements to its proposal are best considered following
engagement with the Teck board as this would allow the parties to
jointly explore ways it could alter its proposal and address any
issues raised by Teck.
In an open letter to Teck Class B shareholders, Glencore said it
has tried to engage with the Teck board about its proposal but has
been consistently refused any engagement.
"We continue to believe that the proposed merger demerger being
a merger and not a takeover, is demonstrably superior to the
proposed Teck separation. It provides the most compelling value
proposition to Teck shareholders, who would fully and
disproportionately participate in the value creation, synergies and
upside," Glencore said in the letter.
It said that the Glencore proposal would stand and remain valid
if Teck delays its shareholder meeting, or voted down the proposed
separation at the meeting on April 26. However, if it were to go
ahead then Glencore's proposal wouldn't be able to proceed due to
the "significant value destruction" that would arise.
Earlier this month, London-listed Glencore submitted a proposal
to Teck to merge the two businesses in an all-share deal, with a
simultaneous demerger of their combined coal business. However,
this was rejected by the Teck board saying that it would expose its
shareholders to a large thermal-coal business and an oil-trading
business that would pose a "significant" jurisdictional risk.
Last week, Glencore offered a cash incentive to Teck
shareholders that effectively buys them out of their coal exposure.
This was also rejected by the Teck board.
Under the latest proposal, accepting Teck shareholders would
receive 24% of MetalsCo and $8.2 billion in cash.
"Glencore is prepared to meet anytime and anywhere that is
suitable for the Teck board and/or its management team to explore
our proposal," the company said.
Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
April 19, 2023 03:14 ET (07:14 GMT)
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