Glencore Plc (GLEN.L) modified its $22.5 billion all-share takeover bid for Teck Resources Ltd's (TECKb.TO) to include up to $8.2 billion in cash, but Teck's board called it "largely unchanged" and analysts said it will need to rise further still.
Glencore's play for Vancouver-based Teck comes amid a rising wave of buyout offers for mines and mining companies that produce copper and other green energy transition minerals, as opposition to the construction of new mines grows across the globe.
Teck has twice rejected Glencore's unsolicited takeover offer, which was unveiled last week and includes a plan to combine and simultaneously spin off the companies' thermal and steel-making coal businesses and rebrand the remaining copper and other base metals businesses as GlenTeck.
Glencore latest offer is for Teck's shareholders to receive 24% of the combined metals group and up to $8.2 billion in cash for those who may not want exposure to thermal coal, which is the most polluting fossil fuel.
Teck said its board will review and evaluate the offer, but nevertheless believes it is "largely unchanged" from the original bid.
Teck Chief Executive Jonathan Price had told shareholders on Monday that a restructuring announced in February, in which Teck would spin off its steel-making coal unit to focus on copper and other industrial metals, was the only viable option for the company.
"The revised proposal does not provide an increase in the overall value to be received by Teck shareholders or appear to address material risks previously raised," Teck said in a Tuesday statement.
Teck has repeatedly said the Glencore combination would expose its shareholders to the risk of a large thermal coal business and also the seemingly incongruous combination of an oil marketing division with a base metals business.
Canada's Keevil family, which has opposed Glencore's bid, controls Teck through its dominant ownership of 'A' class of shares, which have more voting power than the numerous 'B' class shares held by institutions.
"This revised proposal from Glencore helps, but we continue to expect a bump as we believe the premium offered so far is not high enough to get strong support from Teck's Class B shareholders," said Jefferies analyst Chris LaFemina.
"Getting Teck's Class A shareholders on board is a separate, more substantial challenge," LaFemina added.
Reuters on Monday reported that Glencore Chief Executive Gary Nagle plans to meet with some of Teck's Canadian shareholders in Toronto on Thursday to personally lobby them for support.
A vote on Teck's own restructuring plan is scheduled for April 26. If it passes, the separation will then take 7-8 weeks to complete. Nagle has pushed Teck to stall the vote.
"We see no valid reason not to delay your shareholders meeting in respect of the proposed Teck separation in order to allow for discussions and due consideration of our proposed transaction," Nagle said in a letter to Teck's board.
