European activist investment firm Bluebell Capital Partners has reportedly opposed Glencore’s revised proposal to acquire $22.5bn Canadian mining company Teck Resources.
Bluebell said that the proposed acquisition would combine two businesses with questionable synergies, according to Reuters’ report.
Glencore revised its proposal to provide Teck shareholders who wish to exit from exposure to thermal coal, a 24% stake in the combined metals group, along with up to $8.2bn cash.
Separately, Teck confirmed that its Board of Directors unanimously rejected Glencore’s revised unsolicited proposal, saying it is not in the best interest of the company.
The company’s decision is based on a detailed review of the revised unsolicited proposal and recommendation of its independent Special Committee of the Board.
Teck board chairman Sheila Murray said: “Glencore has made two opportunistic and unrealistic proposals that would transfer significant value to Glencore at the expense of Teck shareholders.
“Teck’s proposed separation creates a significantly greater spectrum of opportunities to maximize value for Teck shareholders.
“The Special Committee and Board continue to recommend that shareholders vote for the proposed separation into Teck Metals and EVR as the best pathway to fully realize the greatest value.”
In February this year, Teck announced its plans to separate its metals and coal operations into two independent companies, Teck Metals, and EVR, as part of its business restructuring.
Earlier this year, Teck Board of Directors has unanimously rejected a $22.5bn unsolicited takeover bid from Swiss commodity trading and mining company Glencore.
Glencore offered 7.78 of its shares, in exchange for each Teck Class B subordinate voting share, and 12.73 shares for each Teck Class A common share held.
Last week, the company reinforced its earlier proposal to split its business into two separate entities, saying it is the only optimal option to maximise its shareholder value.
Glencore revised its $22.5bn offer to acquire Teck, adding an $8.2bn cash element to its offer.
Teck said that its earlier separation plan will create a great value for both Teck Metals and EVR.
Teck CEO Jonathan Price said: “Glencore recognizes that post-separation it would be exposed to significantly greater competition from other parties, which is why it is trying to frustrate Teck’s separation process.
“The fundamental flaws of Glencore’s revised proposal continue to make it a non-starter. It does not address major inherent risks including substantial regulatory hurdles, jurisdictional and ESG concerns, and diluting the base metals business with significant oil trading.”
Teck Chairman Emeritus Norman Keevil said: “Now, pre-separation, is not the time to explore a transaction of this nature. I have the utmost confidence in the Board’s and our management teams’ strategy to maximize value for each of Teck Metals’ and EVR’s shareholders after the separation.”
