Bloomberg Línea — Amid a takeover bid by Glencore, Canadian mining giant Teck Resources Ltd. (TECK) has completed a joint venture transaction involving a copper-zinc project in Mexico.
Teck and Agnico Eagle Mines Ltd. said last week they signed a JC shareholders agreement in a “high-quality” copper-zinc project in San Nicolás, in Zacatecas state, Mexico.
The mine, in Mexico’s north-central region, will be owned by both companies, with a 50% share each, with a value of $580 million, and is seen by Teck as part of its strategy to grow its copper portfolio, the companies said in a press release.
Glencore, a Swiss-based commodity and trading company, has proposed a takeover of the Canadian mining giant. According to Bloomberg News, Glencore offered to buy Teck for $23 billion last week, marking one of the world’s biggest mining takeovers “if it happens”.
The deal, Bloomberg reported, “would be the second-largest mining acquisition in Canada, where some of the industry’s biggest transactions have emerged in the past two decades.”
Teck Resources has rejected Glencore’s proposal urging its investors to support another corporate plan to separate its metals and coal businesses.
According to Bloomberg, Teck is seeking investor approval to support a split up of the company, creating Teck Metals Corp. to focus on mining base metals like copper and zinc and Elk Valley Resources Ltd. to operate steelmaking coal assets.
Glencore’s offer to acquire Teck and then spin off the coal businesses is a “non-starter,” Teck’s CEO Jonathan Price said in a statement. The proposal “is a departure from reality,” Teck Chief Executive Officer Jonathan Price added in a Monday call with investors. “There is no path to a deal with Glencore,” Bloomberg reported.
Some of Teck’s main shareholders have voiced their opposition to Glencore’s takeover bid.
Norman Keevil, Teck’s controlling shareholder and chairman emeritus, said in a statement: “I unequivocally support the board’s decision to reject Glencore’s unsolicited offer to acquire Teck. Now is not the time to explore a transaction of this nature.”
In turn, Teddy Molsone, a partner at Egerton Capital UK, one of Teck’s main institutional investors, said it would be better to separate the company’s metals and coal businesses as intended, rejecting Glencore’s offer and making the Canadian mining company “much more attractive” to prospective buyers, Bloomberg reported.
Teck’s shareholders will vote on April 26 on the plans to split the company’s operations.