Glencore weighs hostile takeover bid after Teck pulls the plug on its own restructuring proposal

Light reflects on signage at sunset near the Glencore Plc headquarters office in Baar, Switzerland, on Friday, July 6, 2018. Photographer: Stefan Wermuth/Bloomberg via Getty Images

Glencore has won the first round in its battle to take over Canadian mining major Teck Resources and what could well  be coming next is a hostile takeover bid if the Teck board of directors continues to refuse to talk to Glencore.

Teck on April 26 announced it had decided not to go ahead with its proposal to reorganize Teck’s business into two companies: Teck Metals Corp and Elk Valley Resources.
Glencore had announced on April 19 that it “cannot pursue its proposal if the proposed separation succeeds” and indicated that,  for its proposal to remain open to shareholders,  they would either have to vote it down at the April 26 meeting or get the vote on the separation delayed.

Clearly,  sufficient opposition was voiced to the Teck board ahead of the meeting to make the directors realise their separation proposal would be voted down if it was tabled.
Teck CEO Jonathan Price commented, “we have also listened and heard the feedback that some shareholders would prefer a more direct approach to separation. Our plan going forward is to pursue a simpler and more direct separation, which is the best path to unlock the full value of Teck for our shareholders.”

Price dismissed Glencore’s proposals yet again commenting, “Glencore’s rejected proposals remain a non-starter, with the same flawed structure and material execution risks identified by our Board.”

According to a statement released by Glencore, “Glencore confirms that its proposal still stands and, as previously stated, we remain willing to engage with the board and management of Teck to attempt to address the issues they have raised.

“We believe that, with engagement, we could further improve our proposal’s structure, terms and value , which would be in the best interests of all Teck shareholders.”
Glencore added it hopes “the Teck board will, against the backdrop of the feedback provided by its shareholders, engage constructively in order to fully explore our proposal which has not been done to date.

“Glencore remains willing to make an offer directly to Teck shareholders if there continues to be no engagement from the Teck Board. ”

Glencore spokesperson Charles Watenphul declined to comment when approached over whether there had  yet been any contact between the Teck board and Glencore and referred Miningmx to the Glencore statement.