Hanging behind his desk, a painting of an owl looks over the shoulder of Norman Keevil, the 85-year-old mining magnate who controls Teck Resources.
Keevil likes having a “wise old owl” at hand to highlight the importance of listening to mentors and advisers, he writes in his memoir, which served as a useful guide during his 56-year tenure at Teck, Canada’s largest diversified mining company.
But now Teck is the target of a $23bn hostile takeover bid from Glencore, Keevil’s control of the company is coming under fresh scrutiny — leaving some shareholders wishing he would take his own advice and spend more time seeking counsel from others.
The tense situation between Glencore and Teck is building to a head as the Canadian company’s shareholders prepare to cast votes next week on whether the group should split in two. Approval would in effect kill Glencore’s unsolicited offer, which has been repeatedly rejected by Teck’s board.
Glencore wrote to Teck in late March, proposing an all-share offer to merge with Teck, then demerge into two independent parts — a metals company and a coal group.
That bid was timed to pre-empt Teck’s plans to split in two, which were announced earlier this year and will be voted on next Wednesday.
Adding to the drama, Keevil’s vociferous rejection of Glencore’s proposal has highlighted a gap between the company’s supervoting shareholders and common shareholders.
Shortly after Glencore’s initial offer, Keevil told Canada’s The Globe and Mail: “We are not about to be swallowed up by them . . . It is not a matter of price, Canada is not for sale.”
In recent days — after several Teck shareholders and investor proxy advisers expressed their support for considering Glencore’s offer — he softened his tone. “If everybody wants to go the other direction, I can’t go swimming against the tide,” he said.
While Keevil’s patriotic comments have irked some foreign shareholders, they have struck a chord in Canada. Teck is seen as a national champion of the country’s mining sector, which has lost some of its top companies to foreign takeovers in recent decades, a fact that rankles with some Canadians.
The supervoting share structure that gives Keevil control has been an acute point of controversy in recent weeks, even if it may eventually be scrapped.
While Teck’s class A supervoting shareholders have publicly backed the board’s proposals for a split — including Sumitomo which published its voting position on Thursday — a growing number of Class B common shareholders have asked the board to delay the vote and consider Glencore’s offer instead.
“Shareholders would never be thrilled about [Keevil’s comments] when thinking about the value of their investment,” wrote investor proxy adviser Institutional Shareholder Services in a report, pointing to Keevil’s remarks suggesting price was not a significant factor.
This is “only made worse when considering the relative misalignment of voting power underlying the equity positions behind the statements”, ISS said. “It would be appropriate to conclude Dr Keevil effectively has final say over any deal.”
ISS, along with rival proxy adviser Glass Lewis, have recommended a vote against the Teck board’s proposal to split the company.
Keevil and some analysts insist the shareholding structure has been a benefit.
Keevil said recently: “The A shares are like the governor in an engine. So if the engine starts to move too fast, they can slow things down a little bit. But the A shares can’t go against what the majority of what the B shares want to do.”
Chris LaFemina, mining analyst at Jefferies, is also a supporter. “It has saved Teck from being acquired at very weak points in commodity cycles.”
However, despite his defence of the structure, Keevil and the Teck board will next week back a resolution that phases out class A supervoting shares over six years, which is expected to pass.
At the centre of this M&A saga, sits a man who is a geophysicist, miner and dealmaker, born into a mining family. He joined Teck Resources, the company founded by his father, also Norman, in 1963, becoming chief executive in 1981.
At the time he joined Teck, it had just a handful of gold mines across Canada. By the time he retired as board chair in January 2019, it had become a diversified miner with copper, zinc and metallurgical coal assets across the world and annual revenues of C$12bn (US$9bn).
Colleagues who have worked with Keevil describe him as a gentle person who earned the respect of peers and rivals.
John Thompson, a former vice-president at Teck who was hired by Keevil in 1998, said his deep knowledge of the sector made him a unique leader.
“He has a very strong technical understanding of everything to do with mining, and so that’s quite different than many other CEOs and leaders in the mining industry.”
Thompson, who still keeps in touch with Keevil, described him as “a very quiet and private person” but someone who is “tremendously good at working with people, whether he likes them or not.”
Robert Friedland, founder of Ivanhoe Mines, described Keevil as a “mentor” and recalls how the geophysicist invested in Friedland’s project in Voisey’s Bay in the 1990s.
“They have a revolutionary model, of going to the smaller companies and being the partner of choice,” he said. “It’s trust. That’s how Teck got built — it wasn’t through any single discovery, but through a series of partnerships.”
“They were very good to the junior mining companies that they invested in, and had a good reputation,” Friedland recalled. “He had a very gentle persona, making you feel like he’s a man you can trust.”
The coming days will be crucial to determine Teck’s future — and the legacy of the Keevil family with which it is intertwined.
Shareholders are beginning to cast their votes ahead of next Wednesday’s shareholder meeting. If Teck’s proposals look unlikely to get enough support, it could postpone the vote.
Shareholders that publicly support the split include Egerton Capital, Legal & General Investment Management and Bluebell Capital Partners; opponents include Waratah Capital Advisors and passive funds that follow the proxy recommendations.
LaFemina, the mining analyst, stressed the possibility that Glencore could raise its offer. “Without a higher offer, I think that Teck shareholders will vote for the separation.”
If they do, that could impress Keevil, despite Teck’s rejection of the Swiss group’s advances. In his memoir, he referred to one of the key lessons in life: “Don’t take no for an answer too easily.”
