Teck has cancelled a vote today by shareholders on the board’s proposal to split its Elk Valley coal assets into a separate company.
Looming over the vote was Swiss-based Glencore’s bid to acquire Teck, which originally would have been an all-share deal, but was later sweetened with the offer of $8.2 billion cash. Teck’s board said no both times.
In a news release, CEO Jonathan Price insisted the company received “very strong support” from shareholders for its separation plan, however, it also heard feedback that 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,” he said. “Glencore’s rejected proposals remain a non-starter.”
In a letter to shareholders last week urging shareholders to approve the proposed separation, Teck further panned Glencore’s takeover attempt as the “not a realistic or viable option.”
“Glencore’s motivation is plain – they are seeking to opportunistically frustrate the vote and pre-empt a competitive future landscape, which is good for Glencore, and bad for Teck’s shareholders,” the letter read.
“Glencore’s proposal is complex, ill-defined, with the risk of substantial tax impacts, and value loss for our shareholders if it were to proceed.”