Teck scrambles to secure split vote, with outcome uncertain, CIC missing in action and back-office issues causing frustration: source

Glencore PLC, which has a hostile takeover on the table for Teck, is hoping that Teck’s shareholders will vote against the split, and in turn force the board to engage with the company.

At least two-thirds of votes cast by shareholders must be in favour for the separation to be approved.

While the result of the vote is scheduled to be made public on Wednesday, Teck will already have a good idea of where it stands, as most shareholders vote ahead of the meeting, and at this point the source said that the vote is too close to call.

The Globe and Mail is not identifying the source because the discussions are private, and the person was not authorized to speak publicly.

After noon PDT today, which is the proxy voting deadline, votes cast by shareholders won’t be guaranteed to factor into the outcome.

With only hours to go before the deadline, China Investment Corp.’s vote has not yet come in, and Teck’s advisers are baffled as to the reason why, the source said.

CIC was Teck’s biggest shareholder as of its last public disclosure on March 23. With a 10.3-per-cent stake in Teck’s B shares, CIC has outsized influence on the outcome of the vote.

Investors that owned stock on the record date of March 7 are eligible to vote in the meeting. If CIC sold its shares after the record date, it would not have any skin in the game any more.

CIC and Teck did not respond to a request for comment for this story.

One scenario that appears a possibility is that CIC’s vote does not make it by the proxy deadline.

At that point, whether to accept CIC’s vote or not, will be at the discretion of Teck’s chair, Sheila Murray.

If the final numbers after the proxy deadline show that Teck has secured enough votes to move forward on the split, it likely won’t accept any more votes from CIC or anybody else.

But Teck will have wait until well past the deadline before it gets an accurate reading on where it stands. The source said that Teck is dealing with several administrative challenges that are causing the scorecard to be skewed.

Some investors are “overvoting” their holdings, owing to voting shares that were acquired after the record date, the source said.

In addition, there is a significant lag on the scorecard in instances where investors have flipped their votes, the source said. Shareholders are allowed to change their vote, as long as it is logged ahead of the proxy deadline.