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TORONTO – Sherritt International Corp. is poised to win its proxy fight against dissident shareholder George Armoyan, but the battle ensures the miner will be under pressure to deliver in the months ahead.
Sherritt is likely to receive enough votes for a victory at its annual meeting in Toronto on Tuesday, according to people close to the situation. Even Mr. Armoyan acknowledged he is in a tough fight. The chief executive of Clarke Inc. wants to replace three members of the board with himself and two handpicked nominees.
“It is what it is,” he said in an interview. “Life goes on. You give it your best shot and go on to the next thing.”
Mr. Armoyan is frustrated over some of Sherritt’s tactics, and thinks the company spent way too much money fighting him off. He is also very upset by the decision of Institutional Shareholder Services (ISS) to back Sherritt’s incumbent board, as he believes the proxy advisory firm did not give his arguments a close enough look.
“They never spoke to me. It looks like they had their mind made up,” he said. There is always a chance of a last-minute settlement before or during the annual meeting, but both Sherritt and Mr. Armoyan said that such a deal is unlikely. There were numerous attempts at a settlement early in the dispute, but the mud-slinging from both sides has gotten worse since then.
“The longer you’re into this, the more difficult it becomes [to settle],” Sherritt chairman Hap Stephen said in a recent interview.
Even if Mr. Armoyan ran a perfect campaign, he was facing a tough road because of rising nickel prices, which are up almost 30% since he began his push in late December. Stronger prices drove Sherritt’s stock up and left him at a disadvantage.
Mr. Armoyan argued that company insiders are enriching themselves while not doing nearly enough to cut costs and improve Sherritt’s operations. Sherritt dismissed the complaints and claimed Mr. Armoyan has no experience that would help the company.
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