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Teck cancels shareholders vote on separation proposal

Teck has cancelled a vote today by shareholders on the board’s proposal to split its Elk Valley coal assets into a separate company.

Looming over the vote was Swiss-based Glencore’s bid to acquire Teck, which originally would have been an all-share deal, but was later sweetened with the offer of $8.2 billion cash. Teck’s board said no both times.

In a news release, CEO Jonathan Price insisted the company received “very strong support” from shareholders for its separation plan, however, it also heard feedback that shareholders would prefer a more direct approach to separation.

“Our plan going forward is to pursue a simpler and more direct separation, which is the best path to unlock the full value of Teck for our shareholders,” he said. “Glencore’s rejected proposals remain a non-starter.”

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In a letter to shareholders last week urging shareholders to approve the proposed separation, Teck further panned Glencore’s takeover attempt as the “not a realistic or viable option.”

“Glencore’s motivation is plain – they are seeking to opportunistically frustrate the vote and pre-empt a competitive future landscape, which is good for Glencore, and bad for Teck’s shareholders,” the letter read.

“Glencore’s proposal is complex, ill-defined, with the risk of substantial tax impacts, and value loss for our shareholders if it were to proceed.”

Meanwhile, Teck is reporting a $36 million profit at its Trail operation in the first quarter, compared to $34 million for the same period last year.

But that is dwarfed by the company’s overall gross profit of $1.7 billion compared to $2.5 billion in the first three months of 2022. The coal division accounted for $1.5 billion.

Adjusted profit was $930 million or $1.81 per share.

The Trail operation rated one other mention in the quarterly report, where the company noted it issued a report on low-carbon special high grade refined zinc, confirming each tonne from Trail generates 0.93 tonnes of carbon dioxide equivalent, compared to the global average of three to four tonnes.

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