The proposed merger between Anglo American and Teck Resources is entering the most likely period for a rival offer, according to two sources familiar with the matter, and three bankers following the deal.

One sign of this, perhaps, is that Rio Tinto is reportedly being urged by an activist shareholder to submit a counter-offer.

A successful counter proposal becomes much more difficult after the shareholder votes at both companies, which are scheduled for 9 December, the sources and bankers said.

The date of the votes was announced in a presentation issued in connection with the release of Teck’s 3Q25 earnings last month.

A circular with further details of the merger proposal is expected in the coming days, and it will be between the issuance of this circular and the vote that the highest period of interloper risk exists, one of the sources said.

After the vote, it becomes more difficult to interrupt the transaction, unless there are significant market events affecting Anglo American or Teck, the source added.

Any objections from other parties, such as the Canadian government, have less weight once there is a shareholder approval in place, argued one of the bankers.

On 8 September, London-listed Anglo American and Canada-based Teck jointly announced that they have agreed to a merger of equals that will create a top-five global producer of copper under the name of Anglo Teck.

The deal will see Anglo American acquire Teck in an all-share ‘plan of arrangement’ that, on announcement, valued the target at an implied CAD 32.6bn (USD 23.6bn), including debt.

The deal announcement created a flurry of speculation around potential rival offers and whether it would be the catalyst to a period of intense M&A activity in the sector, as previously reported.

A major issue for rival suitors would be the level of commitments they can give the Canadian government around the combined company’s headquarters, where it is listed, and its investment commitments into the country. This news service has reported that in placating the Canadian authorities, Anglo American’s proposal is generally considered more generous than what other mining majors, such as BHP Billiton, Rio Tinto, or Glencore, might be prepared to offer.

Earlier this week, however, it was reported that activist investor Palliser Capital has urged Rio Tinto’s management to consider an offer for Teck Resources, in tandem with executing Palliser’s long-held position that the dual-listed company should unify its listing in Australia. Rio Tinto is listed in both London (LSE) and Sydney (ASX).

Rio’s Canadian base metals spin

Rio Tinto is the most well-placed of the mining majors to make an approach on Teck, one of sources and two bankers said. Its new CEO, Simon Trott, is ambitious and ready to make his mark, one of the bankers added.

However, with a reorganisation underway, which involves restructuring the Rio Tinto business into three divisions and pursuing several disposals, it may be that the London- and Melbourne-headquartered miner does not have the bandwidth to make a counteroffer within the timeframe, a sector advisor said.

But Rio Tinto is keen to increase its exposure to copper, and there are few options to do so other than an acquisition of Teck, this advisor and the first source said.

The management does seem receptive to the concept of a counteroffer for Teck, but it remains opposed to Palliser’s proposals to unify the shareholding in Australia, the source added.

Also, any offer for Teck that involves merging Rio Tinto’s two listings might entail an unworkably long timeline to completion, the sector advisor noted.

However, the structure proposed by Palliser might work to trump Anglo American’s offer, both in terms of value and Rio Tinto’s Canadian credentials, the source said.

The activist has, according to the first source, urged Rio Tinto to present a share offer that provides a premium of 10%-15% above that offered by Anglo American.

This would be linked to a spin-off of Rio Tinto’s copper and other non-base metal assets into a Canadian entity, listed and headquartered there, and taking advantage of the existing Canadian management team of Rio Tinto, this source said.

Rio Tinto is already one of the foremost employers in the Canadian mining sector, primarily through Alcan, the aluminium business that it acquired in 2007 for approximately USD 38bn, the source noted.

Unbundling non-base metals could then drive a rerating, given the superior trading values of copper-focused miners, the source said.

Rio Tinto’s shareholder register is broadly split between those holding its Australian stock (Rio Tinto Ltd) that value its dividend yield, and holders in London (Rio Tinto plc) that are more growth orientated, the source said.

Rio Tinto would be split between the Canadian spin-off, which would attract the growth-focused investors, and a unified shareholding in Australia, the source added. South32, which was formed out of a spin-off from BHP in 2015, could be viewed as a precedent, he said.

An acquisition of Teck would act as the catalyst for this to happen because it would balance Rio Tinto’s current copper portfolio that is skewed towards the jurisdiction risk of its assets in Mongolia, the source said.

But, with a “bird in hand, you know what you’re getting,” the second source said, noting that Teck’s shareholders may view a complex set of back-to-back transactions, such as those proposed by Palliser, with caution.

A premium would be welcomed but given it would be in scrip it may become lost in the process of a complex spin-off, this source noted.

Another potential fly in the ointment, according to this source and a fourth sector banker, is the combination (in the Canadian spin-off entity) of highly valued copper with less attractive commodities like aluminium.

This would undermine the rationale of spinning off the copper business to realise value through a rerating, the source and the banker said.

The source noted that South32, which could be a precedent here, is in fact weighed down by the mix of its portfolio, particularly aluminium, when compared to the trading values of more pure play copper miners.

While all the copper-focused miners that trade at high multiples have portfolios that also contain other base metals, there is a typical threshold of around 75% of EBITDA attributable to copper that is considered enough to justify a premium, which the potential Rio Tinto base metals spinoff would have when combined with Teck, the other source said.

The plan of arrangement will require approval from 66.66% (two-thirds) of the votes cast by Teck’s class A and class B shareholders. The issuance of new Anglo Teck plc ordinary shares needs to be approved by more than 50% of voting Anglo American shareholders.

Rio Tinto, Teck Resources, Anglo American and Palliser Capital declined to comment.