Teck Resources cancels shareholder vote on separation plan ahead of annual meeting

Vancouver –

Teck Resources Ltd. will not proceed with voting of major shareholders It supports plans to split its metals and steel coal businesses into two companies, instead pursuing a simpler and more direct approach.

The announcement came just hours before the company’s annual meeting on Wednesday.

Tech CEO Jonathan Pryce said the company had strong shareholder support for its spin-off goals.

“We have also heard that some shareholders would prefer a more direct spin-off approach,” Price said in a statement.

“Our plan going forward is to pursue a simpler and more direct separation, which is the best path to maximizing the value of tech for our shareholders.”

Teck faces an unsolicited takeover offer from Swiss commodities trader Glencore. Glencore had urged shareholders to reject the company’s offer in favor of its takeover offer.

Glencore has said it will not be able to pursue its own bid if Teck’s divestiture plans go forward.

Teck is controlled by the Keevil family, who together with Japan’s Sumitomo Metal Mining Co., Ltd. own Class A shares in the company.

Tech Chairman Emeritus Norman Kevil said Glencore’s proposal was the wrong one at the wrong time, but is open to talking about other possible deals once the company completes its own plans to split the business. is.

The unilateral pursuit of Canada’s largest diversified mining company by an international giant has sparked sentiments of economic nationalism.

BC Prime Minister David Eby, BC’s Mining Association and the Greater Vancouver Trade Commission have expressed concern over possible job losses and cast doubt on Glencore’s ESG record.

In a letter to the Greater Vancouver Trade Commission dated April 24, three senior federal ministers said Ottawa was watching the situation “very closely”.

“We need companies like Tech here in Canada,” said the letter, signed by Deputy Prime Minister Chrystia Freeland, Industry Minister François-Philippe Champagne and Natural Resources Minister Jonathan Wilkinson.

It remains unclear whether Ottawa will block a potential Tech acquisition by Glencore. But some observers have noted that the Canadian company’s pursuit of Glencore comes at the same time as the government is committing to the nation’s critical minerals strategy as part of its overall climate plan. .

Teck hopes to expand its copper and zinc production to meet the growing global demand for these metals. Both of these metals are used in the production of electric vehicles and are considered important resources for the coming energy transition.

Teck had proposed splitting its metals and steelmaking coal business into two companies, Teck Metals and Elk Valley Resources. This change required the approval of a two-thirds majority of the Class A shareholders and the approval of a two-thirds majority of the Class B shareholders.

This report by the Canadian Press was first published on April 26, 2023.

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