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Teck's Highland Valley Copper mine is pictured in British Columbia's interior in 2017.JONATHAN HAYWARD/The Canadian Press

Update: Teck is not proceeding with its planned split

Teck Resources Ltd. withdrew its split proposal hours before a crucial vote after evidently not gathering enough votes to secure the transaction. The development is a huge win for Glencore PLC, which has been campaigning to stop Teck’s shareholders from voting for the split, and instead accept its hostile takeover offer. On June 12, however, Glencore put in an offer to buy Teck’s coal business.

At the start of April, Teck Resources Ltd. TECK-B-T, Canada’s largest diversified mining company, received an unsolicited takeover proposal from Glencore PLC GLNCY, a Swiss mining giant. The offer was rejected twice by Teck over the course of a month-long back and forth between the companies’ executives and shareholders, as the future of the Vancouver-based company hung in the balance.

Here’s what has happened leading up to the vote that could change the Canadian mining landscape for good.

Key things to know as crucial Teck Resources split vote nears

Glencore’s unsolicited takeover proposal

On April 3, global mining giant Glencore unveiled an unsolicited all-share takeover proposal for Teck worth US$23.1-billion.

In response, Norman B. Keevil, the patriarch of the family that controls Teck Resources, said he had no intention of allowing the sale of Canada’s biggest diversified miner to the much larger Swiss competitor, saying the company must remain in Canadian hands. A sellout to Glencore is not in the cards, Mr. Keevil told The Globe and Mail. “It’s not a matter of price, Canada is not for sale.”

Glencore is unable to consummate the deal unless Mr. Keevil, chairman emeritus of Teck, gives it his blessing because of the stranglehold he has on Teck’s Class A shares.

Opinion: Teck isn’t falling into Glencore’s arms and Ottawa isn’t offering its blessing either

How the proposal was received by Teck shareholders

In the days following Glencore’s proposal, Sumitomo Metal Mining Co., a major holder of Teck’s super-voting Class A shares, refused to even take a meeting with Glencore to discuss the potential takeover.

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 US$23.1-billion takeover proposal, it can’t move forward.

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.

On April 10, Teck’s chief executive Jonathan Price says Glencore’s proposed takeover is a structurally flawed deal that will end up destroying value for Teck’s shareholders, and called it “a complete non-starter.”

“Glencore hasn’t presented a coherent plan for its proposed coal company,” said Mr. Price in an interview with The Globe and Mail.

Teck considers a partial takeover - with terms

Despite ruling out any chance of accepting Glencore’s takeover proposal, Mr. Price did open the door to a takeover of Teck’s stand-alone metals and coal divisions if a planned split of the company gets the nod from shareholders.

Teck plans to separate into two companies later this year: Elk Valley Resources (EVR), which would hold its metallurgical coal assets, and Teck Metals, which would contain its copper and zinc mines.

On Apr. 26, Teck shareholders will vote on the transaction, and at least two-thirds approval is needed for success.

Mr. Keevil, the controlling shareholder of Teck said he will not exercise his extraordinary veto power to stop the sale of the mining giant’s proposed new metals division to a foreign buyer if Teck’s board is in favour, telling The Globe and Mail that he won’t be “swimming against the tide.”

Mr. Price expressed confidence its biggest B-shareholder, China Investment Corp. (CIC), will vote for the Canadian miner’s proposed split and not back Glencore’s hostile takeover proposal, as he battles to correct misinformation that has seeped into the market.

Sumitomo said it’s standing by long-time partner Mr. Keevil and will vote for the proposed split into two companies, as the outcome hangs in the balance.

How did the vote go?

Teck on April 26 said it is not proceeding with its planned split, after not gathering enough votes to secure the transaction.

Teck has not revealed whether CIC voted for or against the transaction, or whether it abstained.

The Globe and Mail reported that Mr. Keevil was kept in the dark about which way CIC voted in its proposed split vote, with only about 12 hours to go before the start of the shareholder meeting, according to a source familiar with the matter.

What happens now?

On April 27, Glencore threatened to take any new offer directly to Teck shareholders unless the board of the Canadian company opens negotiations that might lead to the merger of the two companies.

In a statement issued one day after Teck withdrew a shareholders’ vote to split the company, Glencore reiterated its willingness to improve its opening, US$23-billion all-share merger offer.

“We believe that with engagement, we could further improve our proposal’s structure, terms and value,” Glencore said. “Glencore remains willing to make an offer directly to Teck shareholders if there continues to be no engagement with the Teck board.”

On May 8, a consortium led by Canadian mining veteran Pierre Lassonde proposed to buy Teck’s coal operations, a deal that could stop Glencore in its tracks, and offer a Made-in-Canada solution that may be palatable to Ottawa.

On May 16, the bosses of Teck and Glencore used a mining conference to present starkly different views on how Teck could create value and whether Ottawa would approve a potential merger of the two companies.

At the same time, Glencore opened the door to buying Teck’s substantial metallurgical coal operations, signalling an interest to own even a piece of the company attempting an uncertain corporate overhaul.

On June 12, Glencore offered to pay cash for Teck’s coal business. The company issued a statement confirming that it has submitted a “proposal” to the Teck board of directors. Glencore did not mention a price in its statement, but analysts assume it would be about US$8.2-billion - the value that Glencore attached to the Teck coal assets in April.

With reports from Niall McGee and Eric Reguly

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