Canadian group led by Lassonde plans to buy Teck’s coal mines

Shares in Teck Resources (TSX: TECK.A/TECK.B; NYSE: TECK), Canada’s largest diversified miner, jumped on Tuesday on news that a consortium led by mining veteran Pierre Lassonde had proposed to buy the company’s coal operations.

The move, reported by the Globe and Mail, could prevent Glencore from acquiring the Vancouver-based mining giant, which in April rejected an unsolicited takeover offer of US$23 billion from the Swiss miner and commodities trader.

Glencore has made it clear it would not back down and said it remained interested after Teck’s restructuring proposal was taken off the table.

“Teck wants to move forward, we’ve been told very definitively,” Lassonde told the paper. “For them, it’s a question of consulting their bankers and consulting other groups. We’re told that they want to get something done between eight to 12 weeks.”

New York-traded shares of Teck were up 4.2% midday at US$46.65 each. In Toronto, Class B shares climbed 5.5% to $62.5, while Class A were changing hands at $103.67 each or 5.4% higher.

The Canadian businessman and philanthropist will need the backing of Teck’s existing coal joint venture steelmaking partners, Japan’s Nippon Steel and South Korea’s Posco, for his proposal to succeed.

In the interview with the Globe, Lassonde said he was optimistic that both companies would back his proposal.

Federal gov’t speaks

The possibility of Teck being swallowed by Glencore has grabbed headlines and the attention of the federal government. Prime Minister Justin Trudeau has expressed that any takeover offer for Teck will have to go through a “rigorous process” to win official approval. 

Finance Minister Chrystia Freeland, Industry Minister François-Philippe Champagne, Natural Resources Minster Jonathan Wilkinson and British Columbia Premier David Eby have all weighed in on the issue. 

Mining takeovers in Canada, particularly when involving large companies, have been closely followed and scrutinized by authorities.

One of the most recent cases was BHP’s attempted acquisition of Potash Corp. of Saskatchewan in 2010. The government of then-Prime Minister Stephen Harper refused to approve the deal under Canada’s foreign investment review laws.