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"This is not just about price. We also see serious structural flaws in the proposal that Glencore has put forward, and we believe that that proposal, looked at as a whole, would destroy value for Teck shareholders and that it has significant execution risk.�

Glencore came out last week with a proposed all-share merger that offered a 20 per cent premium to B class shares and would leave Teck investors holding about a quarter of the combined company. Glencore said it planned to split up the combined company into two divisions, with one focused more on metals and another on coal.

The proposition is similar to Teck's existing plan to split along the same lines, which goes to a vote at its annual meeting April 26. But Price said that Glencore's addition to the mix of significant thermal coal, oil trading, and risky countries, plus the regulatory challenges of getting the merger approved, means the entire proposal is highly uncertain and value-destructive.

“The value of Glencore’s rejected proposal is an illusion. In sharp contrast, the pending separation offers up something concrete," said Price.

Teck said its separation will give shareholders more choice and ways to maximize value because they will hold shares in both Teck Metals and Elk Valley Resources.

Along with ESG risks, Price noted that merging with Glencore would also expose Teck shareholders to the risks of operating in countries like Congo, Equatorial Guinea, Kazakhstan and Russia.

"Glencore’s presence in these and other jurisdictions also creates a very real regulatory overhang,� he said.

Teck's presentation Monday also highlighted how Glencore was issued some US$1.75 billion in identifiable fines and penalties in 2022, which were linked to its guilty pleas to foreign bribery and market manipulation schemes.

In summarizing the case, the U.S. Department of Justice said Glencore engaged in a scheme for over a decade to pay more than $100 million to intermediaries with the intention that much of the money be used to pay bribes to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo.

Price said on the call that maintaining a social license to operate and grow is critical to maximizing shareholder value.

"We know our local partners and how to operate efficiently, sustainably and ethically in these geographies."

This report by ´ºÉ«Ö±²¥was first published April 10, 2023.

Companies in this story: (TSX:TECK.B, TSX:TECK.A)