Teck Resources Ltd.’s TECK-B-T biggest shareholder, China Investment Corp., voted against the mining company’s proposed split last week, burying its chances of moving forward on a restructuring that had been years in the planning, a source familiar with the matter said.
Teck needed at least two-thirds of votes cast by shareholders to be in favour for the split to succeed.
With a 10.3-per-cent stake in Teck’s single voting B shares, China Investment Corp. had an outsized influence on the outcome of the vote. CIC is a state-owned Chinese company, with direct ties to the Communist Party of China.
The Globe and Mail is not identifying the source because the person was not authorized to speak publicly.
Teck spokesperson Chris Stannell wrote in an e-mail to The Globe that the company is “unable to disclose any information about individual shareholder votes under applicable law.”
Teck’s controlling shareholder, Norman B. Keevil, declined comment.
CIC did not respond to a request for comment.
A little more than a week before the annual meeting, Teck chief executive officer Jonathan Price had reassured the market that the company’s relationship with CIC was sturdy, and that he was confident of getting the vote of the Chinese sovereign wealth fund. The split would have seen Teck separate into Elk Valley Resources, holding its metallurgical coal mines, and Teck Metals, containing its copper and zinc mines.
But not only did CIC vote against Teck’s plans, it missed the proxy deadline to vote.
The Globe last week reported that CIC was in danger of missing the cutoff, which was 48 hours before the start of the annual meeting, and Teck’s advisers were baffled as to the reason.
After missing the deadline, it was up to Teck chair Sheila Murray to decide whetherto accept CIC’s late vote.
The day before, and the morning of the annual meeting, Teck scrambled to try to flip shareholders like CIC who voted against the transaction into the “Yes” camp, but to no avail.
CIC first invested in Teck during the depths of the great financial crisis of 2008 and 2009, paying $1.7-billion for a 17.5-per-cent equity stake.
Over the years, CIC has sold down a significant part of its holdings, booking big profits on each occasion.
There had been signs ahead of the meeting that Teck’s relationship with its Chinese stakeholders was evolving.
Quan Chong, a former government of China representative, did not stand for re-election as a board member last week at Teck’s annual meeting.
Mr. Chongjoined Teck amid public controversy in 2016, as he was an active deputy of the National People’s Congress of China at the time, raising concerns about the potential for Chinese interference into Canada’s biggest diversified mining company.
CIC’s “No” vote has left Teck increasingly vulnerable to a takeover by Glencore PLC GLNCY. The Swiss mining and commodities trading giant had encouraged Teck shareholders to vote down the split as a ploy to make it easier for it to acquire the company.
Following Teck’s failed split vote, Glencore reiterated that its US$22.5-billion takeover proposal, which was tabled last month, still stands. Glencore also indicated that if the Canadian miner’s board doesn’t engage, it may take its offer directly to shareholders.
If Glencore were to eventually win enough support from Teck’s B shareholders in a tender offer, it would still need the company’s A shareholders to be on board.
So far, Mr. Keevil and Japan’s Sumitomo Metal Mining Co., Ltd., who both control the A shares, have refused to entertain Glencore’s approach.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
