Glencore said today that it is willing to improve its $23bn (£19.7bn) bid for Teck Resources, ramping up the pressure on Teck’s board to negotiate with mining giant.
“Glencore has never stated that its proposal is ‘best and final’ and that it is not willing to make changes and improvement,” chief executive Gary Nagle said in the letter.
“With engagement, we could improve our proposal’s terms and value, which would be in the best interests of all Teck shareholders,” Nagle added.
Today’s letter marks the first time London-listed miner has publicly approached Teck’s shareholders, having previously only presented its plans to Teck’s board.
Last week, Glencore revised its unsolicited takeover bid to include up to £6.6bn in cash for shareholders.
Glencore has proposed combining their metals businesses to create a £72.5bn commodity juggernaut, while separately combining their coal assets in a spin-off company.
The initial bid represented a 20 per cent premium to Teck’s March 26 closing price, when it was made privately.
However, Teck’s board deemed the initial offer and later revised bids to be too low.
Teck instead wants to proceed with its own plan to split into a coal company and a metals business. Shareholders are set to vote on the plan on April 26.
Nagel reportedly flew out to Canada to meet Teck investors to urging them not to back the Teck split, and nudge them towards their own bid.
But convincing Teck’s shareholders without board approval would not be enough for Glencore to successfully buyout the company.
Teck is effectively controlled by the founding Keevil family. A controversial dual-class structure means they control the majority of the more powerful A shares, and chairman Norman Keevil has confirmed he is not willing to sell at any price.
Yesterday, Teck shareholder Legal & General Investment Management has said it will vote in favour of Teck’s proposed split.
Teck was contacted for comment on Glencore’s letter.
Glencore’s bid is the latest in a growing wave of mining industry buyout offers fuelled by growing demand for copper and other metals critical for renewable technology and electric vehicles.