Teck Resources Ltd. shareholders overwhelmingly voted on Wednesday to wind down the dual-class share structure that has long made the Canadian miner immune to large takeover deals.
(Bloomberg) — Teck Resources Ltd. shareholders overwhelmingly voted on Wednesday to wind down the dual-class share structure that has long made the Canadian miner immune to large takeover deals.
The vote capped a pivotal day for one of Canada’s largest mining companies, with Teck scrapping a shareholder vote on plans to split its metals and coal businesses while maintaining ts opposition to Glencore Plc’s unsolicited $23 billion takeover bid. Still, the vote end Teck’s dual-class structure over six years stayed on the agenda, with investors endorsing the plan that will end the Keevil family’s grip on the firm.
Investors, lawyers, company guests and some Teck alumni gathered at a private members’ club in downtown Vancouver for the company’s annual and special shareholder meeting, which lasted just 34 minutes. Former Chief Executive Officer Don Lindsay and Norman Keevil III, Teck’s current vice chairman, sat inside a half-full chandeliered ballroom, though Chairman Emeritus and 85-year-old mining magnate Norman Keevil Jr. who has stood between Glencore and a mega deal wasn’t seen.
Read More: Teck Pulls Vote on Coal Split, Handing Momentum to Glencore
The vote to end the dual-share structure is significant: The Keevil family, which has been involved with the firm for six decades, has long controlled Teck through majority ownership of Class A shares, which carry more voting control than the more common Class B shares. Sumitomo Metal Mining Co. also owns Class A shares through a vehicle with the Keevils. China Investment Corp. is the largest shareholder of the B shares, according to data compiled by Bloomberg.
Shares of Vancouver-based Teck closed 4.1% higher at C$61.35 in Toronto.
Phasing out the dual-class structure signals a change among Teck and the Keevils that suggests an openness to future transactions with other companies. Teck’s copper and zinc mines have long been admired by the world’s biggest miners, but Keevil’s resistance to sell has kept the company independent so far. Freeport McMoRan Inc., Vale SA and Anglo American Plc have expressed interest in speaking with Teck about its base metals business, should Teck’s plan for a spin-off go ahead as planned.
“To me, the reason Teck has probably stayed together as long as it has is really due to that dual share structure that essentially acts as a poison pill to M&A,” Connor Mackay, PI Financial Corp.’s base metals analyst, said in a phone interview.
Keevil said earlier this month that he’d support a transaction “with the right partner, on the right terms” after the company separated its base metals business from its coal assets.
Teck withdrew its separation plan early Wednesday, citing feedback from some shareholders that wanted “a more direct approach to separation,” according to a statement.
The company’s focus now is to figure out how to undertake a simpler separation of those businesses, CEO Jonathan Price told reporters after the meeting.
“We still believe there’s great value to be had from separating steelmaking coal and base metals,” Price said.
Read More: Glencore-Led Revolt Kills Teck Plan, Keeping Takeover Goal Alive
“They’ve said they want to pursue a different type of split of the business,” PI’s Mackay said. “The big question is what that looks like? Whether it comes with any accelerated wind down of the dual-class structure.”
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