Teck Resources Ltd. TECK-B-T has been approached by Vale Ltd., Anglo American PLC and Freeport-McMoRan Inc., FCX-N which are all interested in exploring transactions if a planned split of Canada’s biggest diversified mining company happens, according to two sources familiar with the discussions.
Vancouver-based Teck will hold a vote on April 26 that will ask shareholders to decide on its plans to split the company into Teck Metals, which will hold its critical minerals mines, and Elk Valley Resources (EVR), which will hold its metallurgical coal mines.
Teck received the approaches from the three giant international mining companies as it attempts to fight off a hostile US$23.1-billion takeover from Glencore PLC of Switzerland, which wants to buy Teck in its standalone format.
Teck is also fending off resistance from two proxy shareholders firms, Institutional Shareholder Services (ISS) and Glass Lewis & Co., which both advised Teck shareholders to vote against the planned split and engage more fully with Glencore.
One of the sources said that Teck had received expressions of interest from at least half a dozen major mining companies, which are interested in various transactions post-split.
The Globe and Mail is not identifying the sources because the discussions are private and they were not authorized to speak publicly.
Teck, Vale, Anglo American and Freeport all declined to comment.
Controlling Teck shareholder Norman B. Keevil on Friday told The Globe that he would be willing to sell Teck Metals to a large foreign mining company, if the board was in favour, saying he would not be “swimming against the tide.”
The Keevil family, which transformed Teck from a $25-million company to one worth $25-billion, has a stranglehold on Teck’s super voting A shares. Those shares carry 100 votes apiece, compared to the single voting B shares.
Mr. Keevil and Teck’s board so far have refused to entertain any approach from Glencore and have said its proposed acquisition would destroy shareholder value, expose Teck to significant execution risk, and harm its environmental, social and corporate governance standing.
Teck has also said that post-split, there will be far more value creation options available to shareholders than right now.
Glencore is seen as one of the few, and perhaps the only, major mining company that would be interested in buying Teck currently, because of Teck’s heavy coal exposure. But post-split, analysts have said that many mining companies will covet Teck Metals, in particular because of its growing copper portfolio.
Teck’s massive QB2 copper mine in Chile, which only went into production a few weeks ago, will be the cornerstone asset of Teck Metals. Copper, alongside lithium and cobalt, is a key metal used in cleaner energy sources such as electric car batteries, as the world transitions away from fossil fuels.
While Mr. Keevil said he would not like to see Teck Metals sold to a foreign buyer, if the board, management, and most of the B shareholders wanted it, he would not stand in their way, he told The Globe on Friday. Mr. Keevil also said that in 50 years, the Keevil family has never gone against the board’s wishes and exercised its veto power.
Mr. Keevil, 85, said the A shares were put in place as an extra set of eyes for the board over strategic decisions, and as a mechanism to give it pause before acting, comparing them to a governor mechanism in an engine.
Glencore chief executive Gary Nagle on Friday told The Globe he would persist in his attempt to get Mr. Keevil, management and the board to engage with him. So far, they have all given him the cold shoulder.
Several analysts expect Glencore to increase the value of its offer before the vote, in an attempt to gain more influence over B shareholders. Glencore last week tweaked its original bid worth US$23.1-billion by adding US$8-billion in cash in lieu of stock, but the value remained unchanged.
Christopher LaFemina, an analyst with Jefferies, wrote in a note to clients that Glencore has breathing room to increase the value of its bid by up to 10 per cent, but beyond that it could be problematic, as “earnings dilution then becomes a factor.”
What is clear is that Glencore only really has one kick at the can.
Mr. Nagle told The Globe on Friday that if Teck’s proposed split goes ahead, Glencore will not be interested in buying both EVR and Teck Metals afterward, owing to the structure that Teck has planned, which he says will turn EVR into a “zombie” company.
Post-split, EVR will pay about 90 per cent of its cash flow to Teck Metals for roughly 11 years, a structure that received a lukewarm reception among Teck investors, when it was announced in February.
Glencore wants to buy Teck and then do its own split, with one division owning its thermal coal with Teck’s metallurgical coal, and another containing the metals mines of both companies, along with Glencore’s energy trading assets.
Teck’s B shareholders gave Glencore’s proposal a warm reception initially, with the stock up 19 per cent earlier this month when it was unveiled.
At least two-thirds of votes cast by B shareholders must be in favour of Teck’s split for it to be approved.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
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