Veteran mining entrepreneur Pierre Lassonde expressed his bewilderment at Teck Resources’s recent decision to sell its coal unit to a Glencore-led consortium for $9 billion.
Lassonde, who said he was “mystified” by the decision, revealed that his consortium, which included Fairfax Financial Holdings founder Prem Watsa and Stelco Holding CEO Alan Kestenbaum, had submitted a bid equal to the accepted offer.
“We put together an offer that was very, very competitive, it was in the best interest of Teck shareholders, Canada … the employees,” Lassonde said in an interview. “And it was a holistic solution with the same price tag.”
Teck Resources on Tuesday decided to sell off its steelmaking coal unit to a group led by Switzerland-based Glencore. The sale will see Glencore take a 77% stake for US$6.9 billion in cash. Nippon Steel meanwhile will acquire a 20% stake for US$1.3 billion in cash, the 2.5% interest it holds in Teck’s Elkview operations, and US$0.4 billion paid in the form of cash flows from the coal operations. The remaining interest will be acquired by POSCO, in exchange for its current 2.5% stake in Elkview.
Teck responded to Lassonde’s concerns in an email statement, stating that they had undertaken a thorough and competitive process, ultimately identifying the Glencore-led transaction as the optimal choice for shareholders and stakeholders. The company cited confidentiality agreements, preventing them from disclosing details of other discussions.
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