Teck Resources CEO Jonathan Price responds to questions from reporters after the company’s shareholders meeting in Vancouver on April 26, 2023.DARRYL DYCK/The Canadian Press
Glencore, the Swiss commodities giant in pursuit of Teck Resources, 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 Thursday morning, one day Teck TECK-B-Twithdrew 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.”
But Teck, led by CEO Jonathan Price, has given no indication that it will negotiate the Glencore and the company remains effectively takeover-proof unless the owners of the Class A shares, with 100 votes apiece, agree to a deal (the widely held Class B shares have a single vote but represent most of the equity). The main owners of the A shares are Chairman Emeritus Norman B. Keevil, who is the son of Teck’s founder, and his ally Sumitomo of Japan.
Teck rejected Glencore’s opening pitch, made in late March, and a revised offer that contained a cash option. On Wednesday, just before the shareholders’ meeting in Vancouver, Teck did so again. “Glencore’s rejected proposals remain a non-starter, with the same flawed structure and material risk identified by our board,” Mr. Price said.
Glencore is thought to be preparing an improved offer that would be delivered next week. Its previous offers came with a 22-per-cent premium, suggesting that the next one might have to take the premium to the 25 per cent to 30 per cent range to gain traction. Glencore would not comment about any improved premium, nor whether its next offer would be its final one.
Teck investors are clearly expecting a higher bid from Glencore and perhaps a bidding war. On Wednesday, Teck’s B shares closed up 4 per cent on the Toronto market, taking their one-year gain to 36 per cent and giving the company a market value of C$32-billion.
The heavy volumes in recent days suggest that the hedge funds are piling in and consider Teck to be “in play.” In big takeovers, hedge funds typically buy 20 per cent to 40 per of the shares, giving them substantial influence over the outcome of any takeover or merger attempt.
In a Thursday note, Angus Aitken of London’s Aitken Mount Capital Partners, said that having a share register loaded with hedge funds would work in Glencore’s favour, since they would push for the Teck board and the controlling A shareholders to accept a takeover pitched at a high premium. “Whoever has been buying has deep pockets, it appears,” he said. “[Those] people are potentially helpful to the Glencore transaction.”
Glencore would make an offer for both the A and B shares and would need two-thirds acceptance to move forward with its proposal to combine its metals division with that of Teck’s, then create a separate company that would own Teck and Glencore’s thermal and metallurgical coal assets.
Teck’s idea was to spin off its metallurgical coal business into a new company called Elk Valley Resources, which would pay most of its cash flow to the pure Teck metals company for about a decade. But many Teck investors did not like the idea of the coal company delivering so much income to Teck Metals, as it would be called, for so long. As a result, Teck realized it would be unable to gain the two-thirds of the votes needed to split the company.
It is not known yet if Glencore would face rival bids for Teck. None of the Glencore’s global competitors – Vale, BHP, Rio Tinto and Anglo-American – has so far expressed interest in owning Teck, at least publicly. But Teck has ample copper assets, which might be of interest to any big mining company pursuing energy-transition metals.
If Glencore makes a new bid, Teck would would have ample time if it chose to encourage a bidding war. Under Canadian securities law, hostile bids must remain open for 105 days, up from 35 days under the previous takeover regime. In its takeover guide, the Baker McKenzie law firm said “The extension of the minimum bid period to 105 days is aimed at addressing concerns that the target boards did not have enough time to respond to hostile takeover bids.”
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
:format(jpeg)/cloudfront-us-east-1.images.arcpublishing.com/tgam/OMSR3NF6JFP5RJ7JLSABZ7S6JI.JPG)
