Hudbay CEO Alan Hair
Toronto-based investment firm Waterton Global Resource Management, which is waging a proxy contest against Hudbay Minerals, has started legal proceedings against the TSX- and NYSE-listed miner in the Ontario Superior Court.
According to a statement from Hudbay, Waterton is alleging that the company’s management information circular in respect of its yearly and special shareholders meeting scheduled for May 7, contains misrepresentations and seeks to constrain its ability to solicit proxies.
“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,” the base metals producer noted on Tuesday.
Further, Hudbay urged shareholders to vote for its nominees at the upcoming meeting, reminding holders that the “time is short and stakes are high”.
Waterton, which owns 12% of Hudbay, has been pushing for changes at the miner since last year to improve performance. It has nominated eight directors to the company’s board and is seeking to replace CEO Alan Hair and chairperson Alan Hibben.
Waterton has put forward former Nevsun executive Peter Kukielski as potential CEO and board member at Hudbay and also suggested former head of the Toronto Stock Exchange’s parent company, Richard Nesbitt, as a potential chairperson.
Hudbay believes the replacement of 80% of its board, including the chairperson and CEO, is unnecessary and ill-timed. The company states that it will be disruptive and threatens its positive momentum.