Another CEO ousted and replaced by an ARU ex board member. Is it a coincidence that his CV doesn't mention his recent affiliation with my old 'friend' Patrick? Anyway BWR is a buy here now IMO.
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Palmiere out as HudBay Minerals CEO
BRENDA BOUW
Tuesday, March 10, 2009
TORONTO — HudBay Minerals Inc. says Allen Palmiere is stepping down immediately as chief executive officer and a member of the zinc miner's board in the wake of its failed takeover of a rival company and amid a brewing proxy battle.
HudBay said Tuesday that Mr. Palmiere, who had been CEO since January of last year, will be replaced on an interim basis by Colin Benner, a member of the board who has been CEO of Lundin, EuroZinc Mining Corp. and Breakwater Resources Ltd.
Tuesday's announcement comes as HudBay's largest shareholder, SRM Global Master Fund LP, has been trying to oust Mr. Palmiere from the top job. SRM is also trying to replace the board with a slate of new directors after the collapse of HudBay's proposed merger with Lundin Mining Corp.
SRM has arranged special meeting later this month for shareholders to vote on its proposed new board, including the reinstatement of Peter Jones as HudBay's CEO. Jones held the top job at HudBay until Mr. Palmiere took over in January, 2008.
Wesley Voorheis, one of the proposed new board nominees, said in a brief interview Tuesday that Benner's appointment was news to him and others vying for a HudBay board position.
He said the March 25 meeting and the proxy fight will go on as planned, as well as the plan to put Jones back in the CEO chair.
“I would rather have Peter Jones,” said Mr. Voorheis, whose company, Voorheis & Co. LLP, is an adviser to SRM.
“He has a long track record of success. The stock price was up a bunch under his watch,” said Mr. Voorheis, a former chief executive officer and director of Hollinger Inc.
“He has some strongly held views about mistakes being made and I think the shareholders will decide that they would rather have him fix the problems than the incumbent, but we'll see.”
Mr. Jones is chairman and CEO of Vancouver-based Adanac Molybdenum Corp., which is currently restructuring under bankruptcy protection.
Last week, SRM urged HudBay shareholders to support the election of a new board, and the removal of Mr. Palmiere to stop them “from destroying further shareholder value, one transaction at a time.”
It said the new board will “reinvigorate” HudBay.
Mr. Palmiere responded saying SRM plans to take control of the company to further its own agenda. He also said SRM's nominees have no mining experience, little experience as directors of publicly traded companies, and have provided no strategic plan for the company's future.
SRM denies it plans to takeover HudBay.
The Lundin deal turned controversial after HudBay shareholders were originally told they couldn't vote on the deal. The Ontario Securities Commission later ruled that a vote must be held because the transaction — which would have more than doubled the number of outstanding HudBay shares — would undermine “the quality of the marketplace” if it went ahead without approval.
Lundin shareholders overwhelmingly approved the merger a few days after the OSC's ruling, but it seemed likely that HudBay shareholders would vote it down and the deal was scrapped late last month.
Opposition to the merger was spearheaded by Jaguar Financial Inc., a relatively small merchant bank, but SRM, the Ontario Teachers' Pension Plan and Corriente Master Fund had also called for HudBay to hold a shareholder vote.
On Tuesday, HudBay shares rose 20 cents or 3.5 per cent at $5.91 on the Toronto Stock Exchange. It has a 52-week trading range of $20.49 in May and $2.70 in November. The shares were trading just shy of $30 in the summer of 2007.
SRM is a Monaco-based hedge fund that owns approximately 11 per cent of HudBay. It denies wanting to take over HudBay.
HudBay, long thought to be a takeover target, is a Toronto-based integrated mining company with its main operations in northern Manitoba and Saskatchewan, plus other operations in Central America.
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