On Monday, April 3, Teck Resources, Canada’s largest diversified miner, turned down an unsolicited purchase offer from Swiss commodity merchant and mining corporation Glencore.
The Offer
As per MINING.COM,the mining and commodity trading corporation offered 12.73 Glencore shares for each Teck Class A common share and 7.78 Glencore shares for each Teck Class B subordinate voting share. The deal suggests a 20% price increase for both.
The simultaneous demerger of the combined thermal coal and met coal businesses into a new publicly listed company was a key component of Glencore’s all-share plan.
According to Jonathan Price, the company’s CEO, Teck feels that the Glencore merger would expose its shareholders to a significant thermal coal business, an oil trading business, and considerable jurisdictional uncertainty, all of which would adversely influence the value potential of Teck’s business.
Thus Teck’s decision to turn down Glencore was undoubtedly unanimous.
Latest Development At Teck’s
In February, Teck announced that it would change its name to Teck Metals Corp. and spin off its massive steel-making coal operation into a brand-new company called Elk Valley Resources Ltd.
Teck has been considering alternatives for its metallurgical coal operation for more than a year since steel-making, one of the most polluting industries, uses the commodity.
Due to the company’s plan to divide the firm in two, analysts have predicted that Teck Metals would become a target for a takeover.
Teck Resources shares rose more than 12% in premarket trade on Monday after the business announced that the board unanimously rejected Glencore’s unsolicited purchase approach.
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