Post says Teck looks to get IOC for $3-billion (U.S.)
Ticker Symbol: C:TCK

Post says Teck looks to get IOC for $3-billion (U.S.)

Teck Resources Ltd (C:TCK)
Shares Issued 566,836,439
Last Close TCK.B 8/13/2013 $27.68
Wednesday August 14 2013 - In the News

The Financial Post reports in its Wednesday edition ever since Rio Tinto put its majority interest in Iron Ore Co. of Canada (IOC) on the block early this year, Teck Resources was viewed as a logical buyer. The Post's Peter Koven, writing in Trading Desk, says Teck has talked about getting into iron ore for years, and this opportunity is in its backyard. Amid reports that Teck is still in the bidding, TD Securities analyst Greg Barnes ran the numbers to determine what it could pay and still maintain its investment-grade credit rating. He calculated Teck could pay about $3-billion (U.S.) for Rio's 58.7-per-cent stake in IOC and get a transaction that would be neutral to net asset value and would leave Teck with enough liquidity for its other projects. He does not think Teck could pay $4-billion (U.S.), which is widely thought to be Rio's asking price, as it would be dilutive and stretch the company's balance sheet. However, that price could be higher than anyone is willing to pay, and Mr. Barnes thinks there is a good chance that Rio will terminate the sale process if no company meets its terms. "Our positive bias is highly contingent on price and Teck maintaining a strong balance sheet," he said in a note.