Sumitomo Metal Mining Co., SMMYY a major holder of Teck Resources Ltd.’s TECK-B-T super-voting Class A shares, is refusing even to take a meeting with Glencore PLC to discuss the Swiss mining giant’s unsolicited takeover proposal for Teck.
Sumitomo and the Keevil family jointly control Teck’s Class A shares that carry 100 votes each. Unless both are on board with Glencore’s GLNCY US$23.1-billion takeover proposal, it can’t move forward.
Earlier in the week, Keevil family patriarch Norman B. Keevil told The Globe and Mail that he had no interest in allowing Vancouver-based Teck to be sold to Glencore, no matter what the price.
Glencore CEO Gary Nagle said that he hoped to engage with Sumitomo to try to persuade the Japanese investor to back its takeover deal, even in the face of Mr. Keevil’s objections.
But that gambit appears to have failed.
“Glencore reached out to Sumitomo, and Sumitomo told them, ‘We don’t take meetings,’ they won’t even talk to them,” said Pierre Lassonde, co-founder of Franco-Nevada Corp., the world’s biggest mining royalty company, and a friend of Mr. Keevil.
When asked how he knows the information, Mr. Lassonde said that Mr. Keevil told him.
Mr. Keevil and Sumitomo did not respond to a request for comment. Glencore declined to comment.
Mr. Lassonde said that after Glencore reached out to Sumitomo, the Japanese investor contacted Mr. Keevil to let him know that the big Swiss miner had made contact, so as to reassure him that it had no intention of engaging.
Mr. Keevil, chairman emeritus of Teck, and Sumitomo have been business partners for more than 30 years. Mr. Keevil earlier told The Globe that he wasn’t worried about Sumitomo going behind his back and doing a side deal with Glencore, saying the two were completely aligned in their thinking.
Mr. Lassonde himself had a 20-year business relationship with Sumitomo, when he was president of gold miner Newmont Corp.
“Sumitomo are the most loyal shareholders you can ever have,” said Mr. Lassonde. “They will never cross you. Never.”
Mr. Keevil earlier in the week said that Teck, one of Canada’s most venerable mining companies, must remain in Canadian hands.
“Canada is not for sale,” he said.
Three generations of the Keevil family have been involved with Teck for more than half a century. Mr. Keevil’s father, Norman Bell Keevil, served as CEO through much of the 1960s and 1970s. Norman B. took over in 1981, and ran the company for the next two decades, then was chairman until 2018. His son, Norman B. Keevil III, has been a director since 1997.
During his tenure at Teck, Norman B. saw scores of Canadian mining giants, including Falconbridge Ltd. and Inco Inc., gobbled up by foreigners. That dynamic resulted in a hollowing out of Canada’s resource sector, and caused him great distress.
“He thought that this was the height of stupidity,” Mr. Lassonde said. “Because of the loss of all of the head offices, all of the research jobs, and all of the intellectual [capital].”
While Glencore appears to have no chance of swaying Mr. Keevil and Sumitomo, it is hoping that Teck investors who hold the B shares, which carry only one vote each, might indirectly signal they are for the Glencore proposal by voting against Teck’s proposed split.
On April 26, investors will weigh in on whether they are on board with Teck’s plans to split itself into two separate units, one holding its legacy metallurgical coal unit, and the other holding its copper and zinc assets, a transaction that was announced in February. At least two-thirds of both the Class A and Class B shareholders must vote in favour for it to succeed.
Glencore said Monday that if Teck’s vote succeeds, its takeover proposal will be dead in the water.