Copper miner Teck Resources said on Thursday it had rejected a sweetened bid from Glencore Plc and made changes to a proposed restructuring plan to allow for an earlier full separation of its metals and coal divisions.
Glencore has offered Teck’s shareholders 24% of the combined metals group and up to $8.2 billion in cash for those who may not want exposure to thermal coal, which is the most polluting fossil fuel. It had initially not offered a cash option.
The Swiss mining giant’s unsolicited bid for the Canadian copper and zinc miner would involve combining and spinning off the thermal and steel-making coal businesses of both companies.
“Now, pre-separation, is not the time to explore a transaction of this nature,” Teck chairman Emeritus Norman Keevil said in a statement.
Glencore’s proposal is materially unchanged and still not in the best interest of Teck, the company said.
It added a revised restructuring plan would now include a potentially shorter path to fully separate the copper and zinc business Teck Metals from the steelmaking coal Elk Valley business and reduce the minimum term of the royalty paid by to Teck Metals to three years from 5.5 years. It also put in place measures to cap annual capital spending by the coal business at $1.3 billion.
Glencore declined to comment, but it has previously said there are flaws in Teck’s own spin-off plan because it would leave the metals unit still exposed to coal revenue.
Nippon Steel, which has agreed to buy 10% in Teck’s coal spin-off, said on Thursday it hoped the current restructuring plan would be approved.
A vote on Teck’s own plan is scheduled for April 26. If it passes, the separation will then take seven to eight weeks to complete.
Glencore chief executive Gary Nagle is on Thursday meeting some of Teck’s Canadian shareholders in Toronto to personally lobby them for support, but several have this week called on the company to increase the overall offer.
Influential proxy advisor Institutional Shareholder Services (ISS) advised shareholders to reject Teck’s restructuring plan on uncertainties and structural issues.
(By Clara Denina and Mrinalika Roy; Editing by Sriraj Kalluvila and Mark Potter)