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Several firms interested in base metals deals-sources
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Controlling Keevil family opposes Glencore deal
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Glencore could raise Teck offer to C$70/shr - JPM
(Adds analyst comments, response from Glencore; changes
dateline))
By Mrinmay Dey
April 17 (Reuters) - Teck Resources Ltd has
been approached by Vale SA , Anglo American Plc and Freeport-McMoRan Inc among others to explore
deals for its base metals business if the Canadian copper miner
goes ahead with a planned split, sources close to the matter
told Reuters on Sunday.
The approaches from more than six mining companies
interested in transactions if Teck spins off its coal business
come as the Vancouver-based miner is fending off an unsolicited
takeover offer from Glencore Plc .
"Following years of strong commodity prices leading to
strong balance sheets and low leverage, we expect to see higher
M&A activity in the industry over the coming years," JP Morgan
analysts Rodolfo Angele and Lucas Yang said in a note on Sunday.
On Sunday, former chairman Norman Keevil, whose family
controls Teck through its dominant ownership of the company's
'A' class of shares, said Glencore's proposal was "the wrong
one, as well as at the wrong time" and the split should go
ahead.
The 'A' class shares in Teck have much more voting power
than the 'B' class shares held by institutions.
"There are numerous mining industry parties who have their
eyes on Teck and would be interested in partnering or investing
in Teck Metals after it separates its base metals and
steelmaking coal businesses," Keevil said in a statement.
He said he would support any kind of transaction, an
operating partnership, merger, acquisition, or sale but with the
right partner and on the right terms for Teck Metals after
separation.
"I believe that pursuing a sale or merger transaction now
would rob our shareholders of significant post-separation
value," Keevil said in the statement.
A spokesperson from Teck said the company does not comment
on market rumours or speculation when asked about the approaches
from more than six mining firms.
Freeport, Vale, Anglo American and Glencore declined to
comment.
Glencore on Tuesday modified its $22.5 billion all-share
takeover bid for Teck to include up to $8.2 billion in cash, but
Teck's board called it "largely unchanged".
Teck has repeatedly rejected Glencore's offer of merging the
companies and subsequently spinning off their combined thermal
and steel-making coal businesses, saying it would expose
shareholders to thermal coal, oil, LNG and related sectors.
"We reiterate our view that Glencore has the ability to
increase its offer to C$70 per share, which would essentially
transfer the value of Glencore's estimated transaction synergies
(US$4.25-5.25 bln) to Teck shareholders," JP Morgan analysts
wrote in a note on Monday.
Teck investors are due to vote on the miner's restructuring
plan on April 26 that will see it spin off its highly polluting
coal business and focus on production of copper and zinc.
Influential proxy advisor Institutional Shareholder Services
(ISS) on Thursday advised shareholders to reject Teck's
restructuring plan on uncertainties and structural issues.
The Globe and Mail first reported interest in Teck's base
metals business.
(Reporting by Mrinmay Dey and Lavanya Ahire in Bengaluru;
additional reporting by Kanjyik Ghosh and Urvi Dagar; Editing by
Bill Berkrot, Sandra Maler and Sonali Paul)
