Teck Resources cancels shareholder vote on separation plan ahead of annual meeting

Teck Resources Ltd. will not go ahead with a keyshareholder vote on its plan to separate its metals and steelmakingcoal businesses into two companies and instead will pursue what itcalled a simpler and more direct approach.

The announcement came just hours ahead of the company's annualmeeting on Wednesday.

Teck chief executive Jonathan Price said the company receivedstrong support from shareholders for the goal of separation.

"We have also listened and heard the feedback that someshareholders would prefer a more direct approach to separation,"Price said in a statement.

"Our plan going forward is to pursue a simpler and more directseparation, which is the best path to unlock the full value of Teckfor our shareholders."

Glencore takeover'wrong one, wrong time'

Teck is facing an unsolicited takeover offer from Swisscommodities trader Glencore, which had urged shareholders to rejectthe company's proposal in favour of its offer to acquire thecompany.

Glencore had said it would be unable to pursue its own bid ifTeck's plan to separate its businesses went ahead.

Teck is controlled by the Keevil family, which owns the company'sclass A shares together with Japanese company Sumitomo Metal MiningCo. Ltd.

Teck chairman emeritus Norman Keevil has said Glencore's proposalis the wrong one, at the wrong time, but that he is open to talkingabout other possible deals once the company completes its own planto split its business.

The unsolicited pursuit of what is Canada's largest diversifiedmining company by an international giant has triggered sentiments ofeconomic nationalism.

Ottawa watching

B.C. Premier David Eby, the Mining Association of B.C. andthe Greater Vancouver Board of Trade have expressed concern overthe potential for job losses and cast doubt upon Glencore's ESGrecord.

In a letter to the Greater Vancouver Board of Trade dated April24, three senior federal cabinet ministers said Ottawa is watchingthe situation "very closely."

"We need companies like Teck here in Canada,"stated theletter, which was signed by Deputy Prime Minister Chrystia Freeland,Industry Minister Francois-Philippe Champagne and Natural ResourcesMinister Jonathan Wilkinson.

It remains unclear whether Ottawa would go so far as to block apotential acquisition of Teck by Glencore. But some observers havepointed out Glencore's pursuit of the Canadian company comes at thesame time that the government has committed to a national criticalminerals strategy as part of its overall climate plan.

Teck is keen to expand its copper and zinc production to meetgrowing global demand for these metals, both of which are used inthe production of electric vehicles and are considered to be keyresources for the coming energy transition.

Teck had proposed splitting up its metals and steelmaking coalbusinesses into two companies, Teck Metals and Elk Valley Resources.

The change required approval by a two-thirds majority vote by theclass A shareholders as well as approval by a two-thirds majorityvote by the class B shareholders.