Hudbay Minerals' (TSE, NYSE: HBM) second-largest investor, Waterton Global Resource Management, has turned up the heat in a boardroom battle that seeks to replace the Canadian miner's chief executive officer and overhaul its board.
The private-equity firm, which holds about 12% of Hudbay, released an investor presentation on Tuesday, detailing what it sees as the path forward for the miner. The plan, it says, has the potential to "close the valuation gap with its peers and realize significant upside for shareholders."
Waterton says the proposed leadership team would restore market confidence on Hudbay and, over the long-term, give shareholders the opportunity to benefit from up to a 140% increase in the share price.Among the proposed changes, Waterton wants to replace eight of the board's 10 members with its own nominees and sees former Nevsun Resources CEO, Peter Kukielski, leading 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 nominees would replace current Hudbay boss Alan Hair and chairman Alan Hibben, both of whom Waterton blame for the company's underperformance.
According to the equity firm, the proposed leadership team would restore market confidence in Hudbay and, over the long-term, give shareholders the opportunity to benefit from up to a 140% increase in the share price.
Hudbay Minerals' shares have lost more than 27% of their value over the past twelve months, but were trading about 3% higher on the New York exchange at $6.16 by 9:45 am local time. According to Waterton, the stock has the potential to climb to about $13.5 (C$19) if the changes proposed are implemented.
The investor 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 mines for zinc and copper, primarily in Canada's Manitoba province, and also has operations in Peru and Arizona.