The boardroom battle between Hudbay and its second largest investor is beginning to heat up.
Waterton Global Resource Management, which owns just shy of 12 per cent of Hudbay, announced on Jan. 16 plans to nominate eight candidates for placement on Hudbay’s 10-member board, including a new candidate for Hudbay CEO.
Waterton announced it had put forward Peter Kukielski, the former CEO of mining company Nevsun Resources, and former Canadian Imperial Bank of Commerce CEO Richard Nesbitt as candidates for Hudbay’s CEO and chairman positions.
Hudbay is run by former Flin Flonner Alan Hair, the company’s current CEO, and chairman Alan Hibben.
In a statement released to Waterton shareholders, chief investment officer Isser Elishis states that the company has “a pervasive culture of entrenchment” and a board both “lacking expertise in key areas” and “lacking the necessary engagement and focus from certain board members.”
Elishis also took aim specifically at Hair and Hibben in the letter, saying Hudbay suffered from “a deficiency of real leadership from the company’s chairman and chief executive officer.”
Hudbay responded with a statement of their own on Jan. 17, claiming Waterton had taken their concerns to the public without engaging in honest discussion with the company.
“The company remains open to constructive engagement with all shareholders. To that end, Hudbay previously met with Waterton and invited it to privately share the names and biographies of individuals it thought could potentially add value to the board,” read the statement, posted on Hudbay’s website.
“Rather than engaging with the board through our normal course process, Waterton has repeatedly changed its demands and now has nominated directors to replace the vast majority (80 per cent) of the board. Waterton, a relatively recent shareholder, is a mining private equity firm that competes with Hudbay for mining assets and may not have interests aligned with other shareholders.
Hudbay also pledged to set a date for its next annual meeting and to release further response to Waterton “in due course.”
