Glencore would take offer for Teck directly to shareholders if board keeps rejecting merger negotiations

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Swiss mining giant Glencore also reiterated its willingness to improve its US$23-billion all-share merger offer

the Glencore and the company remains effectively takeover-proof unless the owners of the Class A shares, with 100 votes apiece, agree to a deal . The main owners of the A shares are Chairman Emeritus Norman B. Keevil, who is the son of Teck’s founder, and his ally Sumitomo of Japan.

Glencore is thought to be preparing an improved offer that would be delivered next week. Its previous offers came with a 22-per-cent premium, suggesting that the next one might have to take the premium to the 25 per cent to 30 per cent range to gain traction. Glencore would not comment about any improved premium, nor whether its next offer would be its final one.

The heavy volumes in recent days suggest that the hedge funds are piling in and consider Teck to be “in play.” In big takeovers, hedge funds typically buy 20 per cent to 40 per of the shares, giving them substantial influence over the outcome of any takeover or merger attempt. Glencore would make an offer for both the A and B shares and would need two-thirds acceptance to move forward with its proposal to combine its metals division with that of Teck’s, then create a separate company that would own Teck and Glencore’s thermal and metallurgical coal assets.

 

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