Canadian-led consortium plans to bid for Teck Resources’ coal business

A new consortium plans to bid for Teck Resources’ metallurgical coal operations, a move that would thwart Glencore’s $23bn offer to purchase the entire company.

Canadian mining investor Pierre Lassonde, chair emeritus of Franco-Nevada, told the Financial Times on Tuesday he had assembled a consortium to bid for Teck’s entire coal business.

“Yes, we do have a [confidentiality agreement] with Teck and, yes, we have put a proposal together,” Lassonde said.

“We have not heard from Teck . . . If I had a live proposal in front of me, I’d be back in Toronto working my ass off,” he added, explaining that he was on a trip to Europe.

Lassonde told The Globe and Mail newspaper in Canada about his bid for Teck’s coal unit earlier on Tuesday.

The news is the latest twist in a battle over the future of the company as it tries to fend off an unsolicited bid from Swiss miner Glencore.

Last month Teck’s board repeatedly rejected Glencore’s hostile bid to acquire the company, saying it wanted to proceed with its own plan to split itself into a metals business and a separate coal company.

However, Teck was forced to pull that resolution at the last minute, after failing to garner enough support from shareholders for the separation. The company said it would look for a “simpler” way to achieve the split.

Teck’s shares rose 5 per cent on the news.

The coal business was valued at $11.5bn in a recent deal, in which Teck sold a 10 per cent stake in the unit to Nippon Steel, which is also a customer for its metallurgical coal.

Lassonde, a Canadian citizen, has been critical of foreign companies entering the country’s mining sector.

Last month he said he was leading a consortium that would take a stake of up to 20 per cent in Teck’s coal business, after it split out from the metals business. Now that the separation plans are on ice, he is bidding to acquire the entire coal unit instead.

“My number one preoccupation is that this is an asset that should stay in Canada,” Lassonde said. “I saw an opening for a group of investors to be lead shareholders in the structure that was proposed originally. That was taken off the table and we think there may be a better way to do this, which we have tabled.”

Glencore is still pursuing its ambition to buy Teck, but has stopped short of increasing its offer. The Swiss group says it will take its offer directly to shareholders if Teck’s board continues to refuse to engage.

Teck said it would “not comment on market rumours or speculation”. Glencore declined to comment.