Glencore underlined continued interest in Teck Resources by holding back US$2 billion for a possible purchase of its coal business. Read on.
The Swiss company earlier this year made an unsolicited offer to buy all of Teck and then split their combined metals and coal businesses, which was repeatedly rejected. In June, it proposedfor about US$8 billion as an alternative to its full takeover bid — still with the intention of spinning off the merged coal operations within a year or two.
Glencore also has been busy with smaller deals beyond Teck, announcing deals to add aluminum and copper assets as well as secure lithium offtake for its trading business. “In the calculation of ‘top-up’ shareholder returns for the current period, we positioned for an amount of US$2.0 billion towards such potential transaction, as a reasonable balance between rewarding shareholders today, and ensuring that the company is appropriately capitalized,” chief executive Gary Nagle said in the report.Nagle repeated previous comments that Glencore isn’t considering an exit from coal separately from the Teck bid.
Glencore also laid out some new details about what its remaining metals business would look like if the Teck coal plan succeeds, including that its net debt cap would drop from the current US$10 billion to US$5 billion. The debt cap is a crucial determiner of its dividend payments.Article content
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