Paulson Scorns ‘Inexcusable’ Delay in Detour Holder Meeting
(Bloomberg) -- Billionaire John Paulson’s hedge fund said Detour Gold Corp.’s plan to hold a shareholders meeting in December to vote on its slate of nominees to replace the miner’s board was “inexcusable.”
On Monday, Detour said it would hold a special shareholders meeting on Dec. 11 after it was requisitioned by Paulson & Co. On Tuesday, the hedge fund called that “the latest entrenchment tactic.”
“It is inexcusable that the board delayed the meeting and refused to hold itself accountable to shareholders,” Marcelo Kim, a Paulson partner, said in a statement.
Paulson has nominated eight directors to replace Detour’s entire board and called for a meeting of shareholders to elect its slate no later than Sept. 28.
“Paulson is the only one pushing for a September meeting for reasons that benefit only Paulson,” Detour said by email, noting the meeting had been set well within the standard time frame. “Paulson threw out a date tactically, knowing full well it was not practical.”
“Shareholders have a clear choice between an inexperienced and impulsive Paulson whose very presence is destroying value and an experienced and mature board and management team at Detour Gold who is leaving no stone unturned to review strategic opportunities and execute on the life of mine plan,” the company said.
Paulson and Detour have been locked in a heated battle over how executives are running the $1.5 billion company and its open-pit mine in northeastern Ontario. Backed by other shareholders, Paulson sent a letter to Detour’s board in June demanding the miner explore all strategic alternatives, including a possible sale. Paulson said it would move to replace the board when the company refused to do so.
Detour responded by saying it planned to push ahead with its own strategy to improve value for shareholders. It said over the years it had entered into confidentiality agreements with various parties, none of which led to an offer to buy the company’s shares.
Detour’s shareholders have been buffeted by the twists and turns. In July, a statement from Paulson -- which said it had received information from Detour that a major gold miner might be interested in buying it -- sent Detour shares up the most in almost a year. People familiar with the matter said Barrick Gold Corp. was the would-be suitor, but the Toronto-based gold giant said this month that Detour didn’t fit with its investment criteria.
Each company also has accused the other of providing false and misleading information and both have said they complained to the Ontario Securities Commission. Both companies have confirmed that Detour served Paulson with a lawsuit.
Detour’s shares increased their losses after the Paulson statement was released, falling 2.2 percent to C$10.91 as of 1:33 p.m. in Toronto. The shares have declined 26 percent this year.
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