Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK)
(“Teck”) announced today a proposed six-year sunset for the
multiple voting rights attached to the Class A common shares of
Teck (the “Dual Class Amendment”).
“The sunset on the multiple voting rights will modernize Teck’s
governance and provide a simplified and competitive capital
structure, following an appropriate continuity period, which we
believe will benefit Teck and all of its shareholders,” said Sheila
Murray, Chair of the Board.
Teck also announced today a proposed reorganization to spin off
its steelmaking coal business to shareholders (the “Separation”).
Teck will seek shareholder approval for each of the Dual Class
Amendment and the Separation at its annual and special meeting of
shareholders, expected to be held on or about April 26, 2023 (the
“Meeting”).
On the effective date of the Dual Class Amendment, each Teck
Class A common share will be acquired by Teck in exchange for one
new Class A common share and 0.67 of a Class B subordinate voting
share. The terms of the new Class A common shares will be identical
to the current terms of Class A common shares, but will provide
that, on the sixth anniversary of the effective date of the Dual
Class Amendment, all new Class A common shares will automatically
be exchanged for Class B subordinate voting shares, which will be
renamed “common shares”.
The implementation of the Dual Class Amendment is not
conditional on the implementation of the Separation, and the
Separation is not conditional on implementation of the Dual Class
Amendment. If both transactions are approved, the Dual Class
Amendment will be implemented before the implementation of the
Separation.
Class A common shares carry 100 votes per share and Class B
subordinate voting shares carry 1 vote per share. As of February
17, 2023, there are 7,765,503 Class A common shares and 506,276,448
Class B subordinate voting shares issued and outstanding. If the
Dual Class Amendment were completed as of that date, approximately
5,202,887 Class B subordinate voting shares would be issued in
connection with the exchange of Class A common shares (representing
approximately 1.0% of issued and outstanding Teck shares). Both the
exchange of Class A shares for new Class A shares and Class B
shares on the effective date of the Dual Class Amendment and the
exchange of the new Class A shares for Class B subordinate voting
shares at the end of the sunset period will be tax-deferred for
Canadian resident Class A shareholders.
Board RecommendationThe terms of the proposed
Dual Class Amendment were negotiated with holders of a majority of
the Class A common shares, Temagami Mining Company Limited
(“Temagami”), SMM Resources Incorporated (“SMM”) and Dr. Norman B.
Keevil by a Special Committee of independent directors of the Teck
Board of Directors that was advised by independent financial and
legal advisors. The Special Committee received opinions from each
of Origin Merchant Partners and BMO Capital Markets to the effect
that as of the date of each such opinion and subject to the
assumptions, limitations and qualifications set forth therein, the
consideration to be received by Teck Class A shareholders pursuant
to the Dual Class Amendment is fair from a financial point of view
to holders of the Class A common shares and holders of Class B
subordinate voting shares, other than Temagami, SMM and Dr.
Keevil.
Teck’s Board of Directors, on the recommendation of the Special
Committee, has determined that the Dual Class Amendment is in the
best interests of Teck and is fair to shareholders, and is
recommending that shareholders vote in favour of the Dual Class
Amendment. Details regarding the process carried out by the Special
Committee, together with a copy of the fairness opinions provided
by Origin Merchant Partners and BMO Capital Markets, will be
contained in the management proxy circular to be mailed to Teck
shareholders for the Meeting.
Approvals and Closing ConditionsThe Dual Class
Amendment is to be implemented through a plan of arrangement under
the Canada Business Corporations Act. Subject to the receipt of
exemptive relief from the Canadian Securities Administrators, the
Dual Class Amendment will be subject to the approval of at least 66
2/3% of the votes cast at the Meeting by the holders of Class A
common shares and Class B subordinate voting shares of Teck, each
voting separately as a class, and to the approval of at least a
majority of the votes cast by holders of Class B subordinate voting
shares of Teck, excluding the votes attached to Class B subordinate
voting shares beneficially owned or controlled by Teck’s majority
Class A common shareholders, Temagami, SMM and Dr. Keevil. Teck has
applied for exemptive relief from the Ontario Securities Commission
from a requirement that would otherwise apply to have the Dual
Class Amendment also approved by at least a majority of the votes
cast by holders of Class A common shares, excluding the votes
attached to Class A common shares beneficially owned or controlled
by Temagami, SMM and Dr. Keevil. In addition to Teck shareholder
and court approvals, the Dual Class Amendment is subject to
customary conditions, including approval of the Toronto Stock
Exchange. Teck expects that the Dual Class Amendment, if approved,
will be completed in the second quarter of 2023.
Temagami, SMM and Dr. Keevil have each agreed to vote in favour
of the resolutions approving the Dual Class Amendment and the
Separation and to elect to receive the maximum number of shares of
Elk Valley Resources Ltd. (“EVR”) that may be distributed to them
in connection with the Separation. SMM and Dr. Keevil have also
agreed to not transfer the EVR shares received by them in
connection with the Separation (including EVR shares they may
receive, directly or indirectly, from Temagami) for a period of 18
months following the effective time of the Separation, subject to
certain limited exceptions. Collectively, Temagami, SMM and Dr.
Keevil own or control 6,187,880 Class A common shares, representing
approximately 79.7% of the aggregate voting rights attached to the
Class A common shares, and 1,057,812 Class B subordinate voting
shares, representing approximately 0.2% of the aggregate voting
rights attached to the Class B subordinate voting shares.
Further information regarding the Dual Class Amendment will be
included in the management proxy circular to be mailed to Teck
shareholders for the Meeting, which will be available on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov. The descriptions of the
Dual Class Amendment in this press release do not purport to be
complete and are subject to and qualified in their entirety by
reference to the management proxy circular. Shareholders are
encouraged to read the management proxy circular and other relevant
materials when they become available.
AdvisorsBarclays Capital Canada Inc., Ardea
Partners LP, TD Securities Inc., and CIBC World Markets Inc. are
serving as financial advisors to Teck. Stikeman Elliott LLP and
Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as
legal advisors, and Felesky Flynn LLP is acting as legal tax
advisor.
BMO Capital Markets, Goldman Sachs & Co. LLC and Origin
Merchant Partners are serving as financial advisors to the Special
Committee and Blake, Cassels & Graydon LLP and Sullivan &
Cromwell LLP are acting as legal advisors to the Special
Committee.
Forward Looking Statements
This news release contains certain forward-looking information
and forward-looking statements as defined in applicable securities
laws (collectively referred to as forward-looking statements).
These forward-looking statements relate to future events or our
future performance. All statements other than statements of
historical fact are forward-looking statements. The use of any of
the words “anticipate”, “plan”, “continue”, “estimate”, “expect”,
“may”, “will”, “project”, “predict”, “potential”, “should”,
“believe” and similar expressions is intended to identify
forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking statements.
These forward-looking statements include, but are not limited
to, statements relating to the proposed Dual Class Amendment,
including the anticipated benefits thereof; the timing for
completion of the Dual Class Amendment; the anticipated timing for
the Meeting; the expected voting support by certain shareholders of
Teck; and other statements that are not material facts.
Although we believe that the forward-looking statements in this
news release are based on information and assumptions that are
current, reasonable and complete, these statements are by their
nature subject to a number of factors that could cause actual
results to differ materially from management’s expectations and
plans as set forth in such forward-looking statements, including,
without limitation, the following factors, many of which are beyond
our control and the effects of which can be difficult to predict:
the possibility that the Dual Class Amendment not be completed on
the terms and conditions, or on the timing, currently contemplated,
and that the Dual Class Amendment may not be completed at all, due
to a failure to obtain or satisfy, in a timely manner or otherwise,
required shareholder and regulatory approvals and other conditions
of closing necessary to complete the Dual Class Amendment or for
other reasons; and other risks inherent to our business and/or
factors beyond Teck’s control which could have a material adverse
effect on Teck or the ability to consummate the Dual Class
Amendment.
Teck cautions that the foregoing list of important factors and
assumptions is not exhaustive and other factors could also
adversely affect its results. Further information concerning risks
and uncertainties associated with these forward-looking statements
and our business can be found in our Annual Information Form for
the year ended December 31, 2022, filed under our profile on SEDAR
(www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form
40-F, as well as subsequent filings that can also be found under
our profile.
The forward-looking statements contained in this news release
describe Teck’s expectations at the date of this news release and,
accordingly, are subject to change after such date. Except as may
be required by applicable securities laws, Teck does not undertake
any obligation to update or revise any forward-looking statements
contained in this news release, whether as a result of new
information, future events or otherwise. Readers are cautioned not
to place undue reliance on these forward-looking statements.
About TeckAs one of Canada’s leading mining
companies, Teck is committed to responsible mining and mineral
development with major business units focused on copper, zinc, and
steelmaking coal. Copper, zinc and high-quality steelmaking coal
are required for the transition to a low-carbon world.
Headquartered in Vancouver, Canada, Teck’s shares are listed on the
Toronto Stock Exchange under the symbols TECK.A and TECK.B and the
New York Stock Exchange under the symbol TECK.
Investor Contact:Fraser PhillipsSenior Vice
President, Investor Relations and Strategic
Analysis604.699.4621fraser.phillips@teck.com
Media Contact:Chris Stannell Public Relations
Manager604.699.4368chris.stannell@teck.com
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