Teck’s base metals business attracts offers from Freeport, Vale, Anglo

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Teck’s base metals business attracts offers from Freeport, Vale, Anglo


© Reuters. FILE PHOTO: Teck Resources sign is on display during the company’s annual general meeting in Vancouver, British Columbia, Canada, April 22, 2010. REUTERS/Lyle Stafford

By Mrinmay Dey

(Reuters) -Teck Resources Ltd has been approached by Vale SA (NYSE:), Anglo American (LON:) Plc and Freeport-McMoRan (NYSE:) Inc among others to explore deals for its base metals business if the Canadian miner goes ahead with a planned split, sources close to the matter told Reuters on Sunday.

The approaches from more than six mining companies interested in transactions if Teck spins off its coal business come as the Vancouver-based miner is fending off an unsolicited takeover offer from Glencore (OTC:) Plc.

On Sunday, former chairman Norman Keevil, whose family controls Teck through its dominant ownership of the company’s ‘A’ class of shares, said Glencore’s proposal was “the wrong one, as well as at the wrong time” and the split should go ahead.

The ‘A’ class shares in Teck have much more voting power than the ‘B’ class shares held by institutions.

“There are numerous mining industry parties who have their eyes on Teck and would be interested in partnering or investing in Teck Metals after it separates its base metals and steelmaking coal businesses,” Keevil said in a statement.

He said he would support any kind of transaction, an operating partnership, merger, acquisition, or sale but with the right partner and on the right terms for Teck Metals after separation.

“I believe that pursuing a sale or merger transaction now would rob our shareholders of significant post-separation value,” Keevil said in the statement.

A spokesperson from Teck said the company does not comment on market rumours or speculation when asked about the approaches from more than six mining firms.

Freeport, Vale and Anglo American declined to comment. Glencore did not immediately respond to a Reuters request for comment.

Glencore on Tuesday modified its $22.5 billion all-share takeover bid for Teck to include up to $8.2 billion in cash, but Teck’s board called it “largely unchanged”.

Teck has repeatedly rejected Glencore’s offer of merging the companies and subsequently spinning off their combined thermal and steel-making coal businesses, saying it would expose shareholders to thermal coal, oil, LNG and related sectors.

“I fully agree with Teck’s Board that there is no deal to be done pre-separation with Glencore or any other party,” Keevil said.

Teck investors are due to vote on the miner’s restructuring plan on April 26 that will see it spin off its highly polluting coal business and focus on production of copper and zinc.

Influential proxy advisor Institutional Shareholder Services (ISS) on Thursday advised shareholders to reject Teck’s restructuring plan on uncertainties and structural issues.

Large investors often follow the recommendations of proxy advisory firms including ISS and its smaller rival Glass Lewis.

The Globe and Mail first reported interest in Teck’s base metals business.



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