By Senad Karaahmetovic
Shares of Teck Resources (NYSE:TECK) are trading over 12% higher in premarket Monday after the company said its board received and unanimously rejected an unsolicited and opportunistic acquisition proposal from Glencore PLC (OTC:GLNCY).
The Swiss commodity trading and mining company offered 7.78 Glencore shares for each Teck Class B subordinate voting share and 12.73 Glencore shares for each Teck Class A common share. The offer implies a 20% premium for both.
Teck said it is not exploring a possible sale at the moment.
“We believe that our planned separation creates a greater spectrum of opportunities to maximize value for Teck shareholders,” said Sheila Murray, Chair of the Board of Teck.
“The Special Committee and Board remain confident that the proposed separation into Teck Metals and Elk Valley Resources (EVR) is in the best interests of Teck and all its stakeholders, is a much more compelling transaction and does not limit our optionality going forward.”
Teck believes that the acquisition by Glencore would expose its shareholders “to a large thermal coal business, an oil trading business and significant jurisdictional risk, all of which would negatively impact the value potential of Teck’s business,” said Jonathan Price, CEO of the company.
Glencore (LON:GLEN) shares dipped 3% in today’s London trading session on the Teck news.