Submitted on 26 March, Glencore’s proposal contemplated a merger with Teck and a subsequent demerger of their metals and coal businesses.
Glencore made an all-stock offer to purchase Teck in which it offered 7.78 Glencore shares for each Class B subordinate voting share and 12.73 Glencore shares for each Class A common share of Teck.
The offer from Glencore reflects a 20% premium over Teck’s March 26 closing stock price.
Based on Bloomberg’s calculations, the deal would have been worth $23bn, based on last Friday’s closing price.
Teck declined the offer saying that it would expose its shareholders to a sizable thermal coal business, an oil trading industry, and a sizable jurisdictional risk.
It added that this would contradict Teck’s ESG obligations, have a detrimental impact on the potential value of its business, and transfer significant value to Glencore at the expense of Teck shareholders.
Teck board chair Sheila Murray said: “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 maximise value for Teck shareholders.”
Earlier this year, Teck announced a business reorganisation that would see it split its operations to create a copper-focused company and pure-play steelmaking coal entity.
Shareholders are set to vote on the reorganisation plan on 26 April 2023.