Teck cancels split, but prized copper assets will be in high demand — via financialpost
For now, Teck has made no indication that it intends to engage with Glencore and it has the means to resist the pressure: Its dual-class share structure, which endows class-A shares with 100 votes apiece, provides some built-in protection against hostile takeovers.
Lindsay, who resigned last year after 17 years, had always said the company would use its metallurgical coal assets, including four mines in British Columbia to fund its copper business. In the first quarter of 2023, steelmaking coal accounted for 63 per cent of the company’s $3.78 billion in revenues, and 76 per cent of its $1.66 billion in gross profits.
That proposal was scrapped on April 26, but would have put Teck’s steelmaking coal assets into a separate company called Elk Valley Resources or EVR. That company, in turn, would have been obligated to send roughly 90 per cent of its free cash flows to Teck, rebranded as Teck Metals, for either 3.5 years or until it had sent $7 billion — whichever occurred later.
“Investors are also concerned that the coal spin-off will see significant selling pressure,” Hacking wrote on Feb. 21. Earlier this month, Glencore’s chief executive Gary Nagle flew into Toronto to meet with Teck’s class-B shareholders and urge them to vote against the planned separation and put pressure on Price to engage with him.Article content
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