- Teck Resources Ltd TECK urged investors to support its plan for splitting its metals and coal businesses while confirming its opposition to a $23 billion takeover proposal from Glencore Plc, saying the proposal is not actionable and bad for Teck shareholders.
- In an investor presentation, Teck says Glencore's purported $4.25 – $5.25 billion NPV in synergies is significantly higher than past Glencore estimates from 2020 without rationale.
- The upside is illusory, while the dilution is real. It also says Glencore's proposal exposes Teck shareholders to significant jurisdictional and portfolio risk.
- In February, Teck Resources announced reorganizing its business to separate Teck into two publicly-listed companies: Teck Metals and Elk Valley Resources Ltd (EVR), while spinning off the steelmaking coal business to shareholders.
- Scotia Capital says, "In our view, the planned separation of the company into a growing Americas-focused copper business (Teck Metals) will make an even more attractive future takeover target post the six-year sunset."
- In March, Glencore proposed merging with Teck and demerging their combined metals and coal businesses.
- "We continue to believe that the Glencore offer has a very low probability of success even at a sweetened price..." writes Scotia Capital.
- Stifel analyst writes, "We reiterate our view that we see the greatest long-term value for shareholders to be Teck's proposed plan."
- As per the analyst, separated Teck Metals and EVR could attract its bidders, and Teck Metals, in particular, could be a more attractive target."
- "Our take on Glencore's offer remains unchanged, as we continue to view Glencore's proposal as unlikely to gain enough shareholder support to overcome Teck's value proposition."
- Price Action: TECK shares are down 2.64% at $42.81 on the last check Monday.
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TECKTeck Resources Ltd
$35.000.84%
Edge Rankings
Momentum
17.51
Growth
17.04
Quality
89.65
Value
44.97
Price Trend
Short
Medium
Long
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