The Detour Lake mine
Canadian miner Detour Gold on Thursday moved to end an increasingly acrimonious proxy fight with Paulson & Co by committing to include two of the US hedge fund’s nominees on its board and pledging to start a CEO search “immediately” after settling the proxy contest.
Paulson nominees Steven Feldman and Christopher Robinson will replace longstanding directors Lisa Colnett and Jonathan Rubenstein on the Detour board, joining the incumbent directors Edward Dowling, Alan Edwards, Andrew Falzon, Michael Kenyon, Judy Kirk, Alex Morrison and James Gowans.
Kenyon, who is interim CEO, also agreed to step down from the board on the earlier of a new CEO being named and the next annual general meeting. Detour stated that the uncertainty that Paulson had created regarding the board’s composition had undermined efforts to conduct a search for a new CEO until now.
Paulson had nominated eight directors to replace the entire Detour board and had called for a meeting of shareholders to elect its slate by no later than September 28. Detour has called its special shareholders meeting, where its “fresh” board will be considered, for December 11.
Detour, which sent a letter to shareholders on Thursday, urged investors to withhold their votes on Paulson’s six other nominees, calling them “inexperienced” and “intent on pursuing Paulson’s self-serving and value-destroying fire sale agenda”.
“We are not willing to allow an activist shareholder to usurp good governance practices by installing less qualified directors who lack industry knowledge and meaningful board experience, and who are handpicked by and beholden to Paulson. Continuing to push for an elimination of the whole board and create chaos around the CEO role is further evidence Paulson is not aligned with shareholders,” the miner stated in the letter.
It reminded shareholders that the proxy fight started with Paulson’s thesis that Detour should sell itself as quickly as possible and strongly suggesting that it was aware of suitors.
Last month, Detour tried to settle its standoff with Paulson by offering the investor a list of concessions, including a spot on the board and a pledge to consider new ideas the hedge fund brings forward. Paulson reportedly rejected the offer.