Canadian mining company Teck Resources announced the withdrawal of its asset split plan before a key shareholder vote. After the announcement, Teck Resources' stock price in Toronto rose 6%, media reported.
For weeks, the company has argued that splitting its copper and coal businesses is a better choice for shareholders than Glencore's unsolicited takeover bid.
Earlier this month, Teck Resources proposed splitting the company's metals and metallurgical coal businesses into two separate companies. However, the change requires the approval of two-thirds of the majority of Class A shareholders and two-thirds of the majority of Class B shareholders.
Although several of Teck's well-known shareholders publicly supported the split, the company was unable to persuade the two-thirds of shareholders needed to vote for it.
Previously, Teck Resources rejected Glencore's $23 billion takeover bid, after which Glencore increased its cash portion by $8.2 billion in its offer. Over the past few weeks, the two companies have been working hard to win investor support. Teck Resources' withdrawal of the asset split plan could allow Glencore to make another takeover bid.
CEO Jonathan Price said the asset split plan received enthusiastic support. Teck Resources has withdrawn the split plan and will propose new suggestions based on shareholder feedback.
"Shareholders want to see a simpler, more straightforward split, and that's what we're now going to study," Reuters quoted Jonathan as saying in a conference call on April 26.
"We will study a range of alternatives with a focus on maximizing shareholder value." He reiterated his opposition to Glencore's bid, saying "we will not engage in things that distract attention."
(Writing by Alex Guo Editing by Harry Huo)
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