US $22.5 Billion For 100% of Teck - so Coal is worth what?If Glencore offered US$22.5 Billion (C$64/s) for 100% of Teck the question is what is just the coal component of Teck worth.
According to the Teck 2022 FS 63% of its revenue and 73% of its gross profit are related to coal operations. It would therefore appear that the coal portion of Teck is worth about US $13-15 Billion based on Glencores offer of US$ 22.5 Billion.The demand for metallurical coal is now also obvious since Teck has made a propsal to split off the coal operations.
However, this suggests the copper (metals) assets are only worth ~ USS$ 7.7-$9.5 Billion which seems pretty low given their acquisition would make Glencore one of the 3 largest copper producers in the world.
Teck has a major challenge on its hands with respect to putting together deal (they are not good at big decsions) that excludes Glencore. Teck also keeps changing the story about the importance of Canadian ownership: its impossible to figure out what they intend to do (if anything).
Glencore however, also has a bit of a delima on its hands.Their first choice is acquiring all of Teck. If their strategic objective is to become one of the top 3 coal and/or copper producers in the world there are few opprtunities that are this tempting to get them there quickly.
If Glencore fail on their 3rd attempt to acquireTeck, and the coal operations are split off, its game over for Glencore with respect to acquiring Teck (they have also already stated this). So where does that leave the parties?
Teck will have difficulty putting something together that results in the same or better benfit to the shareholders than what Glencore has or will offer. Something lesser will likely end up in a claas action suit by the Shareholders.
Glencore, if it wants 100% of Teck or can be satisfied with only the coal operations, is going to have to make an irrestible offer (read expensive - in the short term) to shareholders (see previous comment).
To be successful Glencore may have to force the uptake of an offer by upping the offer significantly, and perhaps going directly to the shareholders,
The bottom line is - both sides have difficult decisions to make! The back and forth, speculation, stalling and games playing is going to go on forever. The comments about Teck being in discussions with Glencore is likely just smoke and mirrors - stalling for time. Teck have made it clear they wabnt nothing to do with Glencore.
Don't expect anything to be resolved for months - possibly well into 2024.