Glencore blasted for ‘illogical’ takeover of Canadian rival

Glencore has been slammed by an activist shareholder as its attempt to buy a Canadian rival suffered another setback.

In a letter to Glencore chief executive Gary Nagle and chairman Kalidas Madhavpeddi, Bluebell Capital has accused the London-listed mining giant of making an ‘alarmingly illogical’ offer for Teck Resources.

The broadside came as Glencore ramped up its attempts to merge with Vancouver-based Teck and spin off their combined coal businesses into a new venture. 

Bluebell, which is an investor in both Glencore and Teck, claims the deal would be ‘value destructive’.

Teck has already rebuffed an £18billion bid from Glencore and a second offer that included a cash sweetener worth £6.6billion.

Canadian mining magnate Norman Keevil, the controlling investor in Teck, has said he will not sell to Glencore at any price. 

Several other Teck shareholders yesterday urged Glencore to increase its bid. Nagle is set to embark on a charm offensive in Toronto to convince Teck’s investors to support the deal.

However, this is being done against a backdrop of mounting criticism from Bluebell.

Bluebell’s letter to Glencore, which has been seen by the Mail, criticises Glencore for delaying its coal spin-off.

‘It is unfortunate that you have wasted one-and-a-half years failing to reposition the company to take advantage of the long-term growth opportunities in transition metals,’ it said.

‘Glencore shareholders, us included, would be reasonable in their criticism of this short- sightedness, complacency, and lack of strategic thinking for not spinning off thermal coal in a timely manner.

‘Not only have you failed to prepare adequately, by pursuing meritless arguments to push back on the spin-off of thermal coal, but subsequently Glencore has proposed an unsolicited business combination which is sub-optimal for both Glencore’s and Teck’s shareholders.’

Bluebell criticised the ‘seemingly ill health of Glencore’s governance’ and referred to the corruption and bribery scandal that embroiled the Footsie miner in recent years.

Last year the Serious Fraud Office ordered Glencore to pay £280million for ‘highly corrosive’ and ‘endemic’ corruption.

The activist investor has long campaigned for the miner to dump its environmentally-unfriendly coal business.

But coal has been highly lucrative for Glencore, which made billions of dollars last year on the back of surging prices following war in Ukraine.

Glencore is worth around £61billion but Bluebell partner Giuseppe Bivona claims it could command a higher valuation if it ditched coal and focused on copper.

Thermal coal, which is burned in power stations to generate electricity, is the world’s most polluting fossil fuel – and shunned by investors who increasingly claim to espouse green views.

Glencore declined to comment.