2023-04-26 16:00:13
Teck is controlled by the Keevil family, which owns the company’s Class A shares along with Japanese company Sumitomo. (Photo: Getty Images)
Vancouver — Teck Resources said Wednesday it would not go ahead with a shareholder vote on its plan to split its steel and steelmaking coal businesses into two separate businesses, adding it would choose an approach which she described as simpler and more direct.
The announcement came Wednesday, hours before the company’s annual meeting of shareholders.
Teck CEO Jonathan Price said the company has received strong shareholder support for the separation plan.
“We also listened and heard feedback from some shareholders who would have preferred a more direct approach to separation,” Mr. Price wrote in a statement.
“Our plan going forward will be to favor a simpler and more direct separation, which will represent the best path to unlocking the full value of Teck for our shareholders.”
Teck is the target of an unsolicited takeover bid from Swiss miner Glencore, which has urged shareholders to reject Teck’s proposal in favor of its own.
However, Glencore says it would not be able to proceed with its proposal if the plan to spin off Teck’s activities were implemented, as this would make the operation much more complex.
Teck is controlled by the Keevil family, which owns the company’s Class A shares along with Japanese company Sumitomo.
Norman Keevil, chairman emeritus of Teck, said earlier this month that Glencore’s offer is the wrong proposal at the wrong time. He added, however, that he was ready to discuss other possible transactions once the company completes its own plan to spin off.
The unsolicited bid for Canada’s largest diversified mining company by an international giant has sparked feelings of economic nationalism.
British Columbia Premier David Eby, the Mining Association of BC, as well as the Greater Vancouver Board of Trade have expressed concern regarding the potential for job losses and questioned Glencore’s record on factors environmental, social and governance (ESG).
In a letter to the Greater Vancouver Chamber of Commerce dated April 24, three federal cabinet ministers said Ottawa was monitoring the situation “very closely.”
“We need companies like Teck here in Canada,” reads the letter signed by Deputy Prime Minister Chrystia Freeland, Industry Minister Francois-Philippe Champagne and Resources Minister natural, Jonathan Wilkinson.
It remains to be seen whether Ottawa would go so far as to block a possible acquisition of Teck by Glencore. Some observers have pointed out that the presentation of Glencore’s bid for the Canadian company comes at the same time as the government has pledged to put in place a national strategy on critical minerals, as part of its comprehensive climate plan.
Teck wants to expand its production of copper and zinc to meet growing global demand for these metals, both of which are used in the production of electric vehicles and seen as key resources for the upcoming energy transition.
Teck proposed to split its metallurgical and steelmaking coal businesses into two companies, Teck Metals and Elk Valley Resources. The change required approval by a two-thirds majority vote of Class A shareholders as well as approval by a two-thirds majority vote of Class B shareholders.
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