Teck Resources Ltd. announced that its board of directors unanimously rejected an unsolicited $23.2 billion acquisition proposal from Glencore plc that would see Glencore acquire Teck and subsequently separate to create two businesses, which would expose Teck shareholders to thermal coal and oil trading.

“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 maximize value for Teck shareholders,” said Sheila Murray, Chair of the Board, Teck. “The Special Committee and board remain confident that the proposed separation into Teck Metals and Elk Valley Resources (EVR) is in the best interests of Teck and all its stakeholders, is a much more compelling transaction and does not limit our optionality going forward.”

Teck announced in February it was switching its name to Teck Metals Corp. and spinning off its multibillion-dollar steelmaking coal unit into a new company — Elk Valley Resources Ltd.

Teck had been weighing options for its metallurgical coal division for over a year, as the commodity is used in steelmaking, one of the most polluting industries.

The all-share acquisition bid contemplated Glencore offering 7.78 shares for each Teck Class B subordinate voting share, and 12.73 Glencore shares for each Teck Class A common share. The proposal represented a 20 percent premium as of March 26, according to Teck, and would be worth about $23.2 billion.

“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, CEO, Teck.

In a statement, Tech said the Glencore proposal has a high level of complexity and encouraged its shareholders to support Teck’s planned separation which has “all regulatory approvals in place and, following shareholder approval on April 26, 2023, closing is expected on May 31, 2023, allowing Teck shareholders to begin to realize the substantial benefits of the separation in the very near term.”

 Photo credit: Teck