Glencore is prepared introduce a cash element worth up to US$8.2 billion to allow Teck shareholders to exit their coal portfolio. Read on
In a letter sent to Teck’s board, Glencore chief executive Gary Nagle said the company was prepared to modify its proposal by introducing a cash element worth up to US$8.2 billion to allow Teck shareholders to exit their coal portfolio. He added that shareholders could also opt to receive shares from the new metals company the merger would create.
“We believe that it is in your shareholders’ interests to engage with Glencore,” Nagle said in the letter. “We see no valid reason not to delay your shareholders meeting in respect of the proposed Teck separation in order to allow for discussions.”Article content Nagle was referring to Teck’s plan to divide its company into two independent publicly listed entities: one that will solely focus on metals such as copper and zinc needed for the energy transition, and one that will run its steelmaking coal operations. The separation plan will be put to a vote on April 26.
On April 10, Price urged Teck’s shareholders to vote for the separation, adding that Glencore was being “opportunistic” by “trying to move ahead of the separation” since there were many more options for value creation after the separation. Glencore’s proposal to take over Teck follows a similar structure and will potentially create the world’s third-largest copper company alongside a big publicly traded coal company. As per the offer, Glencore would own 76 per cent of the company after the merger, and Teck would own the rest. Teck rejected
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