Canadian miner Teck Resources has dropped its plan to split its coal and base metals businesses, hours before shareholders were due to vote on the proposal.
In February, the company announced plans to change its name to Teck Metals, which would focus on copper and other minerals and spin off its metallurgical coal business into Elk Valley Resources.
Aimed at unlocking the full potential of the two businesses, the proposal recently secured the support of Sumitomo Metal Mining.
Cancelling this plan before the 26 April vote, Teck said that it is now pursuing a restructure that is simpler and more direct.
This comes amid Swiss commodities giant Glencore’s bidding battle for the Canadian company.
Glencore recently said that it is open to an improved bid if the business reorganisation did not materialise.
Teck’s decision comes a day after the company reported its unaudited results for Q1 2023.
The miner’s adjusted profit attributable to shareholders for the first three months of this year stood at C$930m ($682.29m) versus C$1.62bn in Q1 2022.
Adjusted EBITDA dropped to C$1.97bn from C$3bn, while revenues fell to C$3.78bn from C$4.62bn.
Teck CEO Jonathan Price said: “We received very strong support from shareholders for the goal of separation, which is to unlock value through creation of a premier, pure-play base metals company and a world-class steelmaking coal company. We have also listened and heard the feedback that some shareholders would prefer a more direct approach to separation.
“Our plan going forward is to pursue a simpler and more direct separation, which is the best path to unlock the full value of Teck for our shareholders.”
Glencore initially offered nearly $23bn for Teck while proposing to combine and spin off the thermal and steelmaking coal operations of the two companies.
However, Teck rejected the proposal, calling it a ‘non-starter’ and believing it to pose execution risks.
The copper and zinc miner said that such a deal would increase its shareholders’ exposure to thermal coal and oil trading.
Teck’s controlling shareholder Norman Keevil had opposed Glencore’s proposal.
Soon after, Glencore introduced a $8.2bn cash element to its offer to buy out investors seeking an exit from coal exposure.
Earlier this month, Teck shareholders called for an increase on the offer made by Glencore.