Waterton takes Hudbay Minerals to court
Hudbay Minerals’ (TSX, NYSE: HBM) second-largest investor, Waterton Global Resource Management, has filed a lawsuit against the Canadian miner in a bid to constrain its ability to solicit proxies.
Waterton alleges that the company’s management information circular in respect of its annual and special meeting of shareholders to be held on May 7, 2019 contains misrepresentations.
“Hudbay believes that the litigation is frivolous and will vigorously defend itself. The company will seek to recover its legal costs from Waterton and will provide further updates on this matter as developments warrant,” it said in a statement on Tuesday.
Waterton, which holds about 12% of the base metals producer, sparked an ongoing boardroom battle last year, after announcing its intention to try replacing the Toronto-based miner’s chief executive officer and overhaul the board.
The lawsuit escalates tensions between Hudbay and Waterton, which has blamed Hudbay’s management for “abysmal” shareholder returns and “chronic underperformance,” and has proposed five new independent board members, two of whom Hudbay has accepted.
The firm also put forward former Nevsun’s executive Peter Kukielski as board member only (it originally wanted him as CEO as well) and suggested former head of the Toronto Stock Exchange’s parent company, Richard Nesbitt, as a potential chairperson at Hudbay.
The miner has said that replacing 80% of its board, including the chairperson and CEO, was “unnecessary and ill-timed”.
Hudbay mines for zinc and copper, primarily in Canada’s Manitoba province, and also has operations in Peru and Arizona.
Hudbay’s stock was up 2% at market close on Tuesday, trading at C$9.98. The company has a $2.6B market capitalization.
(With files from Reuters)