Teck said to be open to offers once coal spinoff is complete

The Canadian miner said Monday it rejected an unsolicited $23 billion proposal from Glencore Plc and will forge ahead with an April 26 shareholder vote on separating its metals and coal divisions. If investors approve, the split is expected to happen by the end of May, with the base metals producer being renamed Teck Metals Corp.

At that point, the Teck board is likely to be open to hearing offers from prospective partners or buyers including Glencore, the people said, asking not to be identified as the matter is private.

The Swiss commodities firm’s offer for Teck, at a 20% premium, is another sign that big mining companies are on the hunt for acquisitions. BHP Group Ltd. and Rio Tinto Plc are also said to be actively looking to increase their copper exposure.

“The board and special committee are confident that the proposed separation into Teck Metals and Elk Valley Resources is in the best interests of Teck and all its stakeholders,” Chris Stannell, a spokesperson for Teck, said in an emailed statement. “Teck’s proposed separation positions Teck Metals and EVR for success and does not foreclose future opportunities for other value-enhancing transactions at the appropriate point and time.”

In rejecting Glencore’s all-share offer, Teck chief executive officer Jonathan Price said Monday that the spinoff structure proposed by the Swiss firm would expose Teck shareholders to its large thermal coal and oil trading businesses. Norman Keevil, Teck’s chairman emeritus, said that “now is not the time to explore a transaction of this nature.”

Teck has also proposed ending the dual-class share structure that gives control to Class A shareholders — the Keevil family and its partners. But that change wouldn’t take effect for six years. In the meantime, a hostile takeover of Teck is impossible.