UPDATE 2-Canada's Teck exits Fortescue Metals - source

Thu Nov 7, 2013 3:01am EST
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* Teck sells as Fortescue stock hits 18-month high

* Teck has been eyeing Rio's Iron Ore Company of Canada stake

* Block trade priced at 3.5 pct discount to Fortescue close

By Yantoultra Ngui

KUALA LUMPUR, Nov 7 (Reuters) - Canada's Teck Resources Ltd has sold its stake in Fortescue Metals Group Ltd for A$503 million ($479 million), cashing in on a doubling in the world no.4 iron ore miner's value since June, a person familiar with the sale said.

The 3 percent stake is being sold down through a book-build underwritten and run by CIMB, according to a term sheet seen by Reuters.

Vancouver-based Teck, a large copper, zinc and metallurgical coal miner, has long said it wanted to expand into iron ore, and speculation mounted last year it might bid for Fortescue after accumulating a small stake in the miner in early 2012.

However Teck bid earlier this year for Rio Tinto's 59 percent stake in Iron Ore Company of Canada (IOC), which Rio wants to sell for $3.5 to $4 billion. It was among two remaining bidders, sources said in August.

Teck is set to book a small profit on its stake, as it started buying into Fortescue when the shares were below A$5.   Continued...