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Investing.com - Teck Resources Ltd (NYSE:TECK) stock rose after Benchmark reiterated its Buy rating and $48.00 price target on the mining company. The stock has shown strong momentum with a 15.83% gain over the past week, though according to InvestingPro analysis, it’s currently trading above its Fair Value.
Benchmark noted that Teck Resources and Anglo American have reached an agreement to combine in a merger of equals to create the Anglo Teck group.
Under the terms of the deal, Anglo will issue 1.3301 shares to existing Teck shareholders for each outstanding class A and B share, resulting in Anglo owning 62.4% and Teck 37.6% of Anglo Teck on a fully diluted basis.
Benchmark estimates this values Teck at approximately a 17% premium to Monday’s closing price.
Anglo also plans to pay a $4.5 billion (approximately $4.19 per share) special dividend to its shareholders prior to the completion of the merger, which Benchmark indicates essentially offsets the premium paid to Teck and allows more balanced participation for both shareholders in the combined business.
In other recent news, Anglo American has announced a merger of equals with Teck Resources, which will create the world’s fifth-largest copper producer with additional exposure to iron ore and zinc. Following this merger announcement, Berenberg upgraded Anglo American’s stock rating from Sell to Hold and increased its price target to GBP23.00. Teck Resources’ CEO, Jonathan Price, emphasized that the company is focusing on obtaining approval for the merger, while acknowledging that a potential bidding war might arise. S&P Global Ratings revised Anglo American’s outlook to positive from stable, affirming its ’BBB/A-2’ credit ratings, and noted that the merger could ease constraints on the company’s financial position. Jefferies raised its price target for Teck Resources to C$74.00 amid speculation about its acquisition potential, maintaining a Buy rating. Additionally, Deutsche Bank upgraded Teck Resources to Buy from Hold, citing a "compelling value opportunity" despite challenges with its QB copper project. These developments highlight significant strategic moves and analyst reactions surrounding the merger and its implications for both companies.
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