Canadian mining company Teck Resources Ltd. said Tuesday it will carefully review a modified hostile takeover offer put forward by Swiss company Glencore, but added it doesn’t believe the new proposal increases the overall value of the proposed deal for Teck shareholders.
In a statement, the Vancouver-based miner said it also doesn’t believe the new proposal addresses the “material risks” raised by Teck on April 3 when it rejected Glencore’s first takeover offer.
“Teck will advise shareholders of the board’s decision regarding the revised proposal as soon as practicable,” the company said Tuesday.
Earlier in the day, Glencore announced it is modifying its hostile takeover offer for Teck Resources Ltd. to include an US$8.2-billion cash component to its proposal.
Under the revised offer, Teck shareholders would receive 24 per cent of the combined metals company and the cash.
The company’s initial proposal had been an all-stock offer that would have seen Glencore acquire Teck and then split up the metals side of both companies along with parts of Glencore’s marketing business into one company, and the combined coal and some other related assets into another company.
Glencore said Tuesday it acknowledges that certain Teck investors may prefer a full coal exit and others may not desire thermal coal exposure.
“Accordingly, we are prepared, as a modification to the proposed transaction, to introduce a cash element to buy your shareholders out of their coal exposure,” Glencore chief executive Gary Nagle wrote in a letter to the Teck board of directors.
Teck rejected Glencore’s initial unsolicited takeover offer in favour of its own plan, announced in February, that would see it split up its metal and coal businesses into two companies.
The Vancouver-based miner has said that its plan will give shareholders more choice and ways to maximize value because they will hold shares in both Teck Metals and the new coal company, Elk Valley Resources.
Teck is controlled by the Keevil family which owns the company’s class A shares together with Japanese company Sumitomo.
Norman B. Keevil, chairman emeritus of Teck, has told the Globe and Mail newspaper that he has no interest in seeing Teck sold to Glencore.