(Alliance News) - Glencore PLC has a new rival in its bid to acquire Teck Resources Ltd's coal division, with Mumbai-based JSW Steel Ltd scoping out parties to form a consortium, Bloomberg reported on Thursday.
Citing people with knowledge of the matter, Bloomberg reported that JSW is on the hunt for partners for an offer to acquire 75% of Teck's coal arm.
A deal will value the unit at more than USD8 billion, Bloomberg reported.
https://www.bloomberg.com/news/articles/2023-08-17/india-s-jsw-weighs-majority-stake-in-teck-coal-unit?cmpid=BBBXT081723_DEALS&utm_medium=email&utm_source=newsletter&utm_term=230817&utm_campaign=deals
In June, Glencore gave Teck's board something to think about, as it proposed a deal to take the Canadian miner's steel-making coal assets out of its hands.
Glencore's attempts to acquire all of Teck had fallen on deaf ears. In April, Glencore revised its offer for Teck, adding a cash element of USD8.2 billion plus a 24% stake in MetalsCo to the Vancouver-based miner's shareholders. MetalsCo would be a transition metals focused business. It would differ from CoalCo, which would be a standalone coal unit.
Glencore had originally offered 7.78 of its own shares for each Teck Class B subordinate voting share, and 12.73 shares for each Teck Class A common share. This represented a 20% premium for both on the date of the offer. If the deal succeeded, Glencore shareholders would have owned 76% of the merged entity, with Teck shareholders owning the remaining 24%.
Teck's board made it clear it would prefer to go on without Glencore involved. In April, however, Teck pulled its own vote on separation plans after receiving investor feedback.
"We received very strong support from shareholders for the goal of separation, which is to unlock value through creation of a premier, pure-play base metals company and a world-class steelmaking coal company. We have also listened and heard the feedback that some shareholders would prefer a more direct approach to separation," Teck Chief Executive Jonathan Price said at the time.
"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."
By Eric Cunha, Alliance News news editor
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Glencore (GLEN)
