Hudbay Minerals' (TSE, NYSE: HBM) second-largest investor, Waterton Global Resource Management, is seeking to oust the Canadian miner's chief executive officer and overhaul its board.
The private-equity firm, which holds about 12% of Hudbay, wants to replace eight of the board's 10 members with its own nominees and, as part of its plan, wants former Nevsun Resources CEO, Peter Kukielski, to lead the Toronto-based mining company. It also wants Richard Nesbitt, former CEO of the Canadian Imperial Bank of Commerce, to become Hudbay Minerals' chairman.
The proposed names will replace current Hudbay boss Alan Hair and chairman Alan Hibben, both of whom Waterton blames for the company's underperformance.
"Hudbay suffers from a culture of entrenchment," Isser Elishis, Waterton's chief investment officer, said in a letter to shareholders. "We believe that the company's board must evolve in order to meaningfully hold management to account."
Waterton first complained about Hudbay's decisions last year, when it learned the company was planning to acquire competitors and warned that transactions like that could "adversely impact shareholders, the company's balance sheet, and/or the company's ability to effectively progress its current portfolio of assets.
Hudbay Minerals' shares have lost more than 40% of its value in the past year, but were trading about 2.6% higher in both the Toronto and New York exchanges at around noon.
The company mines for zinc and copper, primarily in Canada's Manitoba province, and also has operations in Peru and Arizona.