One of Teck Resources Ltd.’s top investors says it will support company plans to separate its base metals and coal businesses and simplify its share structure, a key endorsement for the miner ahead of a shareholder vote this month.
(Bloomberg) — One of Teck Resources Ltd.’s top investors says it will support company plans to separate its base metals and coal businesses and simplify its share structure, a key endorsement for the miner ahead of a shareholder vote this month.
The separation will make the Canadian company “much more attractive” to prospective buyers, Egerton Capital UK partner Teddy Molson said in a Monday interview. The London-based firm owns 2.25% of Teck’s class B shares, making it the seventh-largest holder of the stock.
Teck is seeking investor approval to support a split up of the company, creating Teck Metals Corp. to focus on mining base metals like copper and zinc and Elk Valley Resources Ltd. to operate steelmaking coal assets. Teck is urging investors to back its plan while fending off a $23 billion takeover proposal by Swiss commodities giant Glencore Plc.
Read More: Teck Calls Glencore Bid ‘Non Starter’ in Appeal to Investors
Glencore’s proposal “woefully undervalues” the Vancouver-based miner, said Molson, whose firm will vote in favor of Teck’s plan at an April 26 shareholder meeting.
“The reason why this separation makes so much sense is because it will make Teck Metals a vastly more attractive acquisition target than Teck Resources, because so many investors today just can’t buy coal,” he said. “When Teck Resources becomes Teck Metals, the universe of candidates who could buy them, I think, expands quite dramatically.”
(Adds shareholder comments from second paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.