Canada’s Teck rejects £18bn takeover bid by London-listed Glencore

Shares in miner Glencore slipped after it confirmed the hostile bid was rebuffed.

Henry Saker-Clark
Monday 03 April 2023 15:26 BST
Glencore Energy UK Limited has admitted five counts of bribery and two of failure to prevent bribery (Alamy/PA)
Glencore Energy UK Limited has admitted five counts of bribery and two of failure to prevent bribery (Alamy/PA)

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Mining giant Glencore has had a 22.5 billion dollar (£18.1 billion) takeover bid rejected for Canadian copper firm Teck Resources.

Shares in the London-listed firm slipped after it confirmed the hostile bid was rebuffed.

Meanwhile, US-listed shares in Teck jumped by over a tenth amid the prospect of a merger deal which could create a £95 billion commodities giant.

Glencore’s all-share offer was a 20% premium to Teck’s closing price on March 26 when the bid was made.

However, Teck said on Monday it received and unanimously rejected the “opportunistic” offer and warned against a tie-up with Glencore’s coal and oil operations.

“The Glencore proposal would expose Teck shareholders to a large thermal coal business, an oil trading business and significant jurisdictional risk, all of which would negatively impact the value potential of Teck’s business, is contrary to our ESG commitments and would transfer significant value to Glencore at the expense of Teck shareholders,” said Jonathan Price, chief executive officer of Teck.

The Glencore bid also comes two months after Teck launched a proposal to carve up its business to boost value, spinning out coal operations from the firm’s copper and zinc operation.

Sheila Murray, chair of the board at Teck, said: “The board is not contemplating a sale of the company at this time.

“We believe that our planned separation creates a greater spectrum of opportunities to maximise value for Teck shareholders.”

Glencore said it would create “two standalone companies” if a deal was struck.

It would spin out its profitable coal business, forming a “CoalCo” with its thermal coal assets and Teck’s metallurgical coal assets.

The group’s second operation would be a separate “MetalCo” incorporating their industrial metals divisions, as well as Glencore’s oil trading arm.

The commodities firm said it believes a merger deal could secure up to 5.25 billion dollars (£4.2 billion) worth of synergies after tax.

“The scale and quality of Glencore’s business, together with its uniquely complementary footprint and strategic fit with Teck, including its strong and demonstrable commitment to being a responsible and ethical operator, make Glencore the obvious partner for an all-share merger with Teck,” the firm told shareholders.

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