Just about two weeks ago, Teck Resources (NYSE:TECK) faced another bid from Glencore (OTC:GLCNF) to pick up the business. That was after turning down an earlier bid, which was sufficient to drive Teck’s shares up 18% in that day’s trading. Now, Teck is up around 3.5% once again, and all because it, once again, said no to a Glencore bid.
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This time, Teck announced that it wasn’t going forward with a shareholder vote about reorganizing the business into two separate arms. One arm would be restricted to coal mining, while a separate arm would focus on metals. As for why it wasn’t splitting up, word from Jonathan Price, Teck’s CEO, noted that Teck would look for “…a simpler and more direct separation…”
Meanwhile, Price also noted that the latest attempts at buying in from Glencore are still “non-starter(s)” and still possess “…the same flawed structure and material execution risks identified by our board.” The biggest such risks came in the form of environmental, social, and governance (ESG) issues that would stem from Glencore’s mining operations. The move is also being heavily monitored by the Canadian government, which asserts that “We need companies like Teck here in Canada.”
Teck Resources is also lauded by Wall Street. It’s currently considered a Strong Buy, with 14 Buy ratings and three Holds. Further, thanks to an average price target of $48.48 per share, Teck Resources stock offers shareholders 8.46% upside potential.
