Pierre Lassonde Isn’t Too Happy About the Teck-Glencore Deal
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.
Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
