Glass Lewis Supports 3 Dissident Nominees at Hudbay Minerals


(Bloomberg) -- A prominent shareholder advisory firm has recommended investors partially support efforts from one of Hudbay Minerals Inc.’s largest investors to revamp the board, including withholding their votes for the company’s chairman Alan Hibben.

Glass Lewis & Co. urged investors to support three nominees from a slate of four board candidates put forth by the Toronto-based private equity firm Waterton Global Resource Management Inc. The advisory firm said that despite a shifting series of requests and criticisms, the dissident’s core case -- that the company has been value destructive, holds a spotty record for project management, and has employed “regressive and misleading tactics” to deter shareholder action -- “holds water.”

“Recent and conspicuously-timed rebound notwithstanding, we believe the bulk of Hudbay’s performance over the last several years demonstrates an objectively substandard commitment to preserving and improving shareholder value,” Glass Lewis said in its report.

Hudbay’s shares rose 2.3 percent to C$9.10 as of 12:11 pm. in Toronto, giving the company a market value of C$2.4 billion ($1.8 billion).

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A representative for Toronto-based Hudbay wasn’t immediately available for comment.

“We are pleased that Glass Lewis has supported our case for change at Hudbay,” Isser Elishis, Waterton’s chief investment officer, said in a statement. “Our objective is to ensure Hudbay is well-positioned to deliver long-term shareholder value.”

Waterton, which owns a 12.1 percent stake in Hudbay, nominated five directors and has been locked in a battle with the miner since October, when it first went public with its concerns about the company’s leadership and direction. It said Wednesday one of its nominees, A.E. Michael Anglin, was withdrawing from its slate in order to join the board of Antofagasta Plc, leaving just four nominees.

Hudbay has struck back at Waterton, arguing that shaking up the company’s leadership could derail the momentum it has generated this year. Nevertheless, it has included two of Waterton’s nominees on its own slate of directors. It said last week that the company’s largest holder, Letko, Brosseau & Associates Inc., which it said owns a 13.4 percent stake in Hudbay, has agreed to support the company’s slate.


Glass Lewis recommended shareholders elect Richard Nesbitt, Daniel Muniz Quintanilla and David Smith from the dissident’s slate. It noted that Smith was also supported by the company.

Glass Lewis urged shareholders to withhold their votes for Waterton’s nominee, Peter Kukielski, who was put forth as a potential replacement to Hudbay’s current chief executive officer, Alan Hair. The advisory firm recommended Hair be re-elected to the board alongside six other directors from the company’s slate. It recommended withholding their votes for Hibben due to his long tenure and other concerns.

“These two directors would be independent of Waterton and would, together with mutually accepted candidate David Smith, represent only three members on an eventual board of 11, falling well short of the position needed to unilaterally advance material change without the support of several other incumbent board members,” Glass Lewis said. “We thus consider their election could represent a credible, low-risk and favorable outcome when viewed relative to the status quo.”

©2019 Bloomberg L.P.

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