Value-Adding Vision: Analysts Dismiss Glencore's Deal as Teck Resources' Proposed Plan Gains Favor - Teck Resources (NYSE:TECK)

Teck Resources Ltd TECK urged investors to support its plan for splitting its metals and coal businesses while confirming its opposition to a $23 billion takeover proposal from Glencore Plc, saying the proposal is not actionable and bad for Teck shareholders.
In an investor presentation, Teck says Glencore's purported $4.25 – $5.25 billion NPV in synergies is significantly higher than past Glencore estimates from 2020 without rationale.
The upside is illusory, while the dilution is real. It also says Glencore's proposal exposes Teck shareholders to significant jurisdictional and portfolio risk.
In February, Teck Resources announced reorganizing its business to separate Teck into two publicly-listed companies: Teck Metals and Elk Valley Resources Ltd (EVR), while spinning off the steelmaking coal business to shareholders.
Scotia Capital says, "In our view, the planned separation of the company into a growing Americas-focused copper business (Teck Metals) will make an even more attractive future takeover target post the six-year sunset."
In March, Glencore proposed merging with Teck and demerging their combined metals and coal businesses.
"We continue to believe that the Glencore offer has a very low probability of success even at a sweetened price..." writes Scotia Capital.
Stifel analyst writes, "We reiterate our view that we see the greatest long-term value for shareholders to be Teck's proposed plan."
As per the analyst, separated Teck Metals and EVR could attract its bidders, and Teck Metals, in particular, could be a more attractive target."
"Our take on Glencore's offer remains unchanged, as we continue to view Glencore's proposal as unlikely to gain enough shareholder support to overcome Teck's value proposition."
Price Action: TECK shares are down 2.64% at $42.81 on the last check Monday.

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