GLNCY Glencore Plc (PK)

   By Ian Walker 
 

Glencore PLC said Wednesday that it would be prepared to consider improvements to its merger, demerger proposal for Teck Resources Ltd. if its board were willing to engage with it, but would also be willing to go directly to its shareholders if not.

The Anglo-Swiss commodity mining and trading company said that any improvements to its proposal are best considered following engagement with the Teck board as this would allow the parties to jointly explore ways it could alter its proposal and address any issues raised by Teck.

In an open letter to Teck Class B shareholders, Glencore said it has tried to engage with the Teck board about its proposal but has been consistently refused any engagement.

"We continue to believe that the proposed merger demerger being a merger and not a takeover, is demonstrably superior to the proposed Teck separation. It provides the most compelling value proposition to Teck shareholders, who would fully and disproportionately participate in the value creation, synergies and upside," Glencore said in the letter.

It said that the Glencore proposal would stand and remain valid if Teck delays its shareholder meeting, or voted down the proposed separation at the meeting on April 26. However, if it were to go ahead then Glencore's proposal wouldn't be able to proceed due to the "significant value destruction" that would arise.

Earlier this month, London-listed Glencore submitted a proposal to Teck to merge the two businesses in an all-share deal, with a simultaneous demerger of their combined coal business. However, this was rejected by the Teck board saying that it would expose its shareholders to a large thermal-coal business and an oil-trading business that would pose a "significant" jurisdictional risk.

Last week, Glencore offered a cash incentive to Teck shareholders that effectively buys them out of their coal exposure. This was also rejected by the Teck board.

Under the latest proposal, accepting Teck shareholders would receive 24% of MetalsCo and $8.2 billion in cash.

"Glencore is prepared to meet anytime and anywhere that is suitable for the Teck board and/or its management team to explore our proposal," the company said.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

April 19, 2023 03:14 ET (07:14 GMT)

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