Teck Resources Ltd.’s board rejected the latest takeover offer from Swiss company Glencore.
The Canadian miner said on Thursday that the revised offer was not in the best interest of shareholders.
Teck said its board and management team remained committed to its plan announced in February to split its metals and steelmaking coal business into two companies, Teck Metals and Elk Valley Resources.
Earlier this week, Glencore revised its unsolicited bid for Teck to include an $8.2 billion cash component. The proposal would give Teck shareholders 24 percent of the combined metals company and cash.
Teck calls Glencore offer ‘opportunistic and unrealistic’
Sheila Murray, chair of Teck’s board, said the company’s own plan “creates additional opportunities to maximize value for Teck’s shareholders.”
“Tektronix has made it clear that it is not in the interest of our shareholders to be acquired by Glencore and merged with your thermal coal or oil trading businesses,” Murray wrote to Glencore’s board.
“As you have now publicly stated that you are ready to spin off your thermal coal business, we recommend that you go ahead and spin off your oil business and then approach Teck Metals after our own spinoff is complete.”
Teck Resources is controlled by the Keevil family, which together with Japan’s Sumitomo Corporation owns Class A shares in the company.
“Now, before the separation, is not the time to explore a deal of this nature,” said Norman Keevil, chairman emeritus of Teck Resources.
“I have full confidence in the board and our management team’s strategy to maximize value for each shareholder of Teck Metals and EVR following the separation.”
Glencore’s original proposal was an all-stock buyout, buying Teck Resources, and then spinning off the metals business of both companies, along with some of Glencore’s marketing operations, into one company and coal and some other related assets into another.
In revising its offer, Glencore acknowledged that some Teck investors may prefer to exit coal entirely, while others may not want exposure to thermal coal. The cash portion is designed to effectively buy coal exposure to Teck shareholders.
Shareholders of Teck Resources will vote on April 26 on the company’s plan to split its business into Teck Metals and Elk Valley Resources.