VANCOUVER — Teck Resources Ltd. says it has received an unspecified number of "indications of interest" for potential deals on a spinoff of its coal assets as it seeks alternatives to the unsolicited takeover bid being pushed by Glencore.
“There is widespread recognition in the market today of the value of our high-margin, long-life steelmaking coal assets, which has, in turn, generated considerable interest from various parties,” said chief executive Jonathan Price in a statement Tuesday.
The company is working to split its coal assets from its base metal operations as it thinks the two segments will get higher valuations as separate entities.
Vancouver-based Teck's original plan to do so was disrupted when Swiss commodities giant Glencore swooped in with an alternative plan in early April. The offer, which was later sweetened to add more of a cash component, would see shareholders receive a stake in a combined metals company, as well as a choice of cash or shares in a company that would hold their merged coal assets.
Teck called off a shareholder vote on its plan at the last minute on April 26 after it became apparent it did not have the required support for the proposal and said it would pursue an alternative, more simplified split.
The company said Tuesday it will continue to evaluate all value-adding proposals related to its steelmaking coal business to determine if in the best interest of Teck's shareholders and other stakeholders.
"Teck’s Board will appropriately consider and evaluate any proposal that can unlock the tremendous potential of Teck’s premium businesses," said board chair Sheila Murray in a statement.
“We are also resolved to identify a path that ensures continued responsible operations in the Elk Valley and supports a sustainable future for the benefit of employees, local communities and Indigenous Peoples.”
Teck has pushed back against Glencore's proposal that would lump together Teck's higher quality steelmaking coal with Glencore's thermal coal assets used in power generation, and that would also add oil trading to the metals side of the businesses as not aligned with its push toward green-economy focused production.
The company is keen to expand its copper and zinc production to meet growing global demand for these metals, both of which are used in the production of electric vehicles and are considered to be key resources for the coming energy transition.
Teck is, however, facing its own environmental criticism, including from Indigenous groups, on its Elk Valley operations related to selenium contamination of regional waterways that flow south into Montana.
The company is controlled by the Keevil family, which owns the company's class A shares together with Japanese company Sumitomo Metal Mining Co. Ltd.
Teck chairman emeritus Norman Keevil has said Glencore's proposal is the wrong one, at the wrong time, but that he is open to talking about other possible deals once the company completes its own plan to split its business.
Numerous Canadian politicians, including Conservative Leader Pierre Poilievre and B.C. Premier David Eby, have also voiced their opposition to Glencore's potential takeover.
Industry Minister François-Philippe Champagne has said that "we like Teck as a Canadian company," while stopping short of committing to block the deal.
A potential takeover by Glencore would be subject to both a net-benefit review and a national-security review by the federal government, and some observers have pointed out Glencore's pursuit of the Canadian company comes at the same time that the government has committed to a national critical minerals strategy as part of its overall climate plan.
This report by The Canadian Press was first published June 6, 2023.
Companies in this story: (TSX:TECK.B)
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