(Reuters) – Glencore (OTC:GLNCY) has told Teck Resources (NYSE:TECK) shareholders it is willing to improve its $22.5 billion takeover offer, raising pressure on the Canadian miner to ditch a restructuring plan and sit down at the negotiating table.
In an open letter on Wednesday, Glencore said it would consider taking the offer to Teck’s shareholders directly if the board failed to engage.
The Swiss miner and trader made its all-share offer as Teck’s own plan to spin off its metallurgical coal business and focus on copper and zinc nears an April 26 vote.
The bid is the latest in a mounting wave of mining industry buyout offers fuelled by growing demand for copper and other metals critical to the green energy transition.
Glencore Chief Executive Gary Nagle flew to Canada to meet shareholders last Thursday after revising its unsolicited bid to include up to $8.2 billion in cash.
Teck’s board rejected it as too low, adding it would unnecessarily expose shareholders to a large thermal coal business and an unwanted oil trading unit.
“Glencore has never stated that its proposal is ‘best and final’ and that it is not willing to make changes and improvement,” Nagle said in the letter.
“With engagement, we could improve our proposal’s terms and value, which would be in the best interests of all Teck shareholders.”
Glencore’s plan would combine and spin off its thermal coal unit and Teck’s steelmaking coal business.
Teck’s management on Tuesday estimated that after its proposed restructuring, shares in the metals business could trade at C$100 ($74.67) or higher, about 55% above the group’s closing price on Tuesday.
Glencore’s initial bid represented a 20% premium to Teck’s March 26 closing price, when it was made privately.
JP Morgan analysts this week said that Glencore could pay as much as $27.2 billion.
“The vote (on Teck’s restructuring plan) is highly likely to go through without an official bump in terms (from Glencore),” Ben Cleary, portfolio manager at Tribeca Global Natural Resources Fund, told Reuters.
The Vancouver-based miner operates under a dual class structure and needs approval from two thirds of shareholders on both sides for the restructuring.
Canada’s Keevil family owns the majority of ‘A’ class of shares, which have more voting power than the numerous ‘B’ class shares held by institutions.
Teck has said it would explore a corporate transaction or partnership after its restructuring. Sources close to the matter say Teck has had approaches from more than six mining companies interested in its prized metals business.
