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Teck Resources Ltd. took another blow in its defense against Glencore Plc, after influential advisory firm Glass Lewis said shareholders should vote against the Canadian miner’s strategy to split out its coal business.
The Glencore offer represents a reasonably compelling alternative that could warrant discussion and there is no urgency for Teck to have to pursue its separation now, Glass Lewis said in a report.
Teck has rejected two takeover proposals this month from Glencore — which wants to combine both their coal businesses and spin them out together — and is instead pressing ahead with an April 26 vote on its own coal-separation strategy.
Norman Keevil, who holds a blocking vote thanks to Teck’s “supervoting” Class A shares, has rejected a deal with Glencore. However, the company requires approval from both classes of shares voting separately, and the Glencore camp is framing the vote as a referendum on its takeover offer as both sides scramble to win over investors.
Competing proxy advisory firm Institutional Shareholder Services has already recommended shareholders vote against Teck’s plan.
Bloomberg also reported on Friday that Teck’s largest shareholder, China Investment Corp., currently favored Glencore’s coal plan and was considering a vote against Teck’s strategy, although it may require a higher price from Glencore before backing its offer.
Glencore had originally proposed an all-share offer for Teck, but has since offered to add a cash component to buy investors out of their exposure to the combined coal company.
(By Thomas Biesheuvel)
3 Comments
Steve
TECK has two classes of common shares, A and B. The only difference in the two classes is that class A shares have 100 votes each and class B shares have 1 vote each. In the legal document that established the dual share classes it specifically states that in the event of a takeover that class B shares will receive equal compensation to class A shares.
TECK management has proposed that TECK be split into two companies. I have received a proxy statement to vote on several resolutions in an April 26 stockholders’ meeting which are designed to split TECK into a coal mining company and a copper mining company. But far more importantly from class B shareholders’ viewpoint the split would result in class A shares being worth significantly more than class B shares. You can find out more about this topic by reading the TECK “Notice of Meeting and Management Proxy Circular” beginning on page 122.
https://www.teck.com/media/Information-Circular-2022.pdf
If TECK management revises the terms of the split to where the class B shares would receive equal value to the class A shares then I would give serious consideration to voting for the split.
I urge all my fellow class B shareholders to vote against every resolution on the proxy.
Bob Hall
I firmly believe that a Chinese entity has the best interests of Canada at heart. How do you feel about that?
It has been shown the Liberal government is open to bribery (support) on many levels so Glencore will fit right in with Ottawa. Good companies like BHP have been shut out of takeovers in the past. A company with the record of Glencore just may have difficulty as well.
Bob Hall
I do not believe these folks own any shares. They just adise and if you lose your money – it’s your money! Glencore is not a company I would ever want as a partner. It is OK. I am done working so I am not worried about “you will never work in this business again” talk.