Anglo American bids all-stock for Teck to form $50B copper company

Anglo American offered to acquire Canadian miner Teck Resources in an all‑stock deal this week that would create a roughly US$50 billion copper-focused company, but the proposal faces shareholder unease and close scrutiny from Canadian officials. Anglo said it would exchange 1.3301 of its shares for each Teck share, a roughly 17 percent premium to Teck’s prior close, and that the combined group would be based in Vancouver if the transaction is approved. The offer also includes a US$4.5 billion special dividend for Anglo shareholders to be paid before closing.

Some investors and analysts say the package may undervalue Teck and could require a higher bid to secure approval. Alex Garriock, a senior analyst at Canoe Financial, which holds about 0.5 percent of Teck, said in a phone interview that “the value of Teck Resources is higher than what is implied by the deal price,” and that a higher price might be needed to close one of the largest mining deals ever. Analysts at Citigroup and Scotia have also flagged the premium as light given Teck’s underperformance this year, and Scotia analysts said current terms make it unlikely the transaction will clear the required support of...