Dr. Norman Keevil during a news conference at the TSX Broadcast and Conference Centre in downtown Toronto on May 8, 2006.Louie Palu/The Globe and Mail
Norman B. Keevil, the controlling shareholder of Teck Resources Ltd., TECK-B-T 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.”
Through his stranglehold on Teck’s super voting Class A shares, which carry 100 votes apiece, the company’s chairman emeritus can, in theory, block any takeover deal that is in front of the board.
But Dr. Keevil, 85, made it clear in an interview that the spirit of the A shares is not to satisfy the whims of one man. They are meant, instead, as an extra set of eyes for the board over strategic decisions, and as a mechanism to give it pause before acting.
“The A shares are like the governor in an engine. So if the engine starts to move too fast, they can slow things down a little bit, so people can think about it, and act responsibly. But the A shares can’t go against what the majority of what the B shares want to do. That just isn’t there.”
Teck’s Class B shares carry just one vote apiece. Only once has Dr. Keevil believed the board made the wrong strategic decision: its proposed acquisition of Fording Canadian Coal Trust in 2008. But even though he was opposed to the deal, and voted against it as a board member, he did not use his super voting A shares to torpedo the acquisition, and it went through.
“We’ve never once, not in 50 years, gone against what the board wants to do,” he said.
After Switzerland’s Glencore PLC GLNCY made its US$23.1-billion takeover bid for Teck last week, Dr. Keevil told The Globe that he was opposing the deal on economic nationalist grounds, saying that “Canada is not for sale.”
On Friday, Dr. Keevil said that while he would still not like to see Teck fall into foreign hands, if the board, management and a majority of the B shareholders decide they want to sell to a foreign giant, he would not stop it.
“If everybody wants to go the other direction, I can’t go swimming against the tide,” he said.
Dr. Keevil also doubled down on his distaste for the Glencore deal. He said he’s in complete agreement with the board’s rationale for rejecting the deal, namely that exposing shareholders to Glencore’s ESG-unfriendly thermal coal and oil businesses is a bad idea.
“There’s no reason why we can’t sit down after the separation with Glencore, or with anybody else, and look at possibilities, whether that be at the asset level or an [outright acquisition].”
Many analysts expect Teck Metals, which will hold the company’s critical minerals assets, to generate multiple takeover approaches from bigger miners.
Dr. Keevil, in the meantime, is confident that the B shareholders will vote for Teck’s planned split, and he challenged a report on Friday that the company’s biggest B shareholder, Chinese state-controlled company China Investment Corp. (CIC), is poised to vote down the split.
“We have talked to them,” he said. “And that’s certainly not our impression, but time will tell.”
CIC did not respond to a request for comment.
Glencore CEO Gary Nagle on Friday meanwhile continued his quest to try to sway Teck’s B shareholders to side with Glencore, and vote down Teck’s proposed split, which is scheduled for a shareholder vote on April 26.
“We’re open to engage with Dr. Keevil, talk, sit down with him, sit down with the board, sit down with management, and engage and understand concerns and issues,” Mr. Nagle said in an interview on Friday.
Mr. Nagle would not comment on whether Glencore will increase the value of its proposed takeover, but he ruled out any notion of his company paying all cash.
“That goes against the concept of a merger, and we want shareholders to participate in the terrific upside that we bring, and the synergies that we’re creating.”
Mr. Nagle said that he had met with several large institutional shareholders who hold B shares and he expressed optimism that they would vote against Teck’s deal as a show of support for the Glencore approach.
“Multiple shareholders have said they’re going to vote against it,” he said referring to Teck’s planned split.
When pressed to reveal who those shareholders were, Mr. Nagle declined to comment.
Under Glencore’s proposed plan, it would split itself into two businesses, one a massive coal company containing its thermal coal along with Teck’s metallurgical coal, and a separate metals business that would also hold Glencore’s energy trading assets.
Niall McGee