GLNCY Glencore Plc (PK)

By Robb M. Stewart

Teck Resources Ltd. has secured support for its plan to split in two from one of its biggest shareholders, Sumitomo Metal Mining Co., presenting a hurdle to Glencore PLC's bid to buy the Canadian miner.

Tokyo-based Sumitomo said Thursday it will vote in favor of Teck's move to separate its steelmaking coal business from the base metals operations at the shareholders meeting set for next Wednesday.

Sumitomo said it has since 1997 built a trusted partnership with Teck, beginning with joint exploration at the Pogo gold mine in Alaska through development of the mine, to a move in 2018 by Sumitomo to buy an indirect 25% stake in the Quebrada Blanca copper mine in Chile where phase two of its development is underway. The company owns almost 19% of Teck's Class A shares, and a 49% stake in Canada's Temagami Mining Co., which holds 55% of the A shares.

Early in the week, controlling shareholder and chairman emeritus Norman Keevil said he fully supports the Teck board's rejection of the takeover proposal from metals and mining giant Glencore, and noted there are numerous parties in the mining industry with their eyes on Teck that would be interested in partnering or investing in the company after it separates its operations.

The Keevil family together with Sumitomo control a combined about 48% of the total voting power over Teck via the A shares.

In an open letter Wednesday, Glencore said it is prepared to engage with Teck's board to consider improvements to its takeover proposal, but that it is also prepared to go directly to Teck's shareholders with its takeover offer.

Glencore's letter sought to win over holders of Teck's Class B shares. Last week, it said it would add a cash component to its roughly $23 billion unsolicited merger proposal that offered shareholders 24% of MetalsCo, a standalone company that would be created in the merger, and $8.2 billion in cash.

Teck has rejected Glencore's approach as opportunistic and continues to urge its shareholders to support its separation plans.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

April 20, 2023 09:29 ET (13:29 GMT)

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