...for what it's worth:

Keevil will Not Block Sale of Teck Metals
Greg Barnes
Derick Ma, CFA, CPA, CA

Event
In a report over the weekend in the Globe and Mail, Norman Keevil II is quoted as saying that he will not veto the sale of Teck Metals to a foreign buyer if the company's Board is in favour of doing so.

Impact: POTENTIALLY POSITIVE
Leading into the weekend, we were becoming increasingly convinced that Teck's B shareholders could vote against the company's separation proposal based on our conversations with shareholders across the spectrum. Most understood that this would probably result in the status quo being maintained with the Keevil family and Sumitomo likely to block any potential sale of Teck Resources, possibly until the sunset of the Class A shares multi-voting rights in six years.

Mr. Keevil's comments in the Globe and Mail are the first indication that we are aware of that he would allow Teck Metals to be sold to a foreign buyer. Jonathan Price, Teck's CEO, was quoted in the Financial Times on April 10 that management would consider value-enhancing proposals that could include joint ventures, partnerships, and "bids from other suitors" once the separation has occurred.

We believe that Mr. Keevil's comments and reports of third-party interest in Teck Metals could be enough to tilt the B shareholders towards voting for the separation. We believe that separating the coal business from Teck Metals, notwithstanding significant cash flows from coal still flowing to Teck Metals via the Transition Capital Structure, could result in more acquisition interest in Teck Metals from other suitors, given that it will be a "purer" base-metal producer.

And on Sunday, the Globe and Mail also reported that Teck has received expressions of  interest  from  a  number  of  companies  —  including  Vale,  Freeport,  and  Anglo American — about possible transactions following the separation.

Our  sum-of-the-parts  (SOTP)  valuation  for  Teck  Metals  based  on  a  range  of EV/2024E EBITDA multiples of between 7.0x-8.0x for metals EBITDA and 2.0x-3.0x for coal EBITDA is between C$68.00-C$80.00/share. At the midpoint, our SOTP for Teck Metals is ~C$74.00/share.