Swiss firm not giving up on attempt to take over B.C.’s Teck Resources

Glencore said it was willing to consider a higher bid for Teck Resources Ltd., but the Swiss company said the Canadian miner’s shareholders must first reject plans to separate the base metals and steelmaking coal businesses.

In an open letter to Teck shareholders on Wednesday, Glencore Chief Executive Gary Nagle said he believed any such improvements would be best considered after Teck’s board was engaged.

In the letter, Nagle said Glencore had never said its proposal was “the best and final” and was unwilling to make changes and improvements to its proposal.

“Indeed, we believe that by participating we can improve the terms and value of the proposal, which will be in the best interest of all Teck shareholders,” he said.

Teck’s board rejected Glencore’s unsolicited offer that would have given shareholders a stake in the combined metals company with the option of cash or a stake in the company holding the combined coal assets.

The proposal represented a 20% premium when it was first proposed.

Instead, Teck is pursuing a plan announced in February to split its metals and steelmaking coal business into two companies, Teck Metals and Elk Valley Resources.

The proposal will be put to a shareholder vote on April 26.

However, Glencore said it would not be able to implement its proposal if Tektronix’s plan to spin off its business goes ahead as it would significantly complicate the deal.

“A two-step transaction would require the participation of two sets of boards and shareholders and introduce significant potential delays after completion of the proposed separation of Teck Resources,” Nagle wrote.

Teck Resources is controlled by the Keevil family, which together with Japan’s Sumitomo Corporation owns Class A shares in the company.

Norman Keevil, chairman emeritus of Teck Resources, has said Glencore’s proposal was wrong at the wrong time, but he is open to discussing other possible deals after the company completes its own spin-off plan.

Keevil has said he would support a deal with the right partner — whether it be an operating partnership, merger, acquisition or sale — and Teck Metals would do so on the right terms after the separation occurred.

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