Detour’s management has already partially conceded some of the hedge fund manager’s concerns
U.S. hedge fund billionaire John Paulson’s battle to oust the entire board of directors at Toronto-based Detour Gold Corp. and replace them with his own hand-picked group officially ends when final ballots are counted on Tuesday, but he may already claim some victory. And perhaps Detour will too.
Regardless of whether other shareholders grant Paulson’s wish for “wholesale change” on the board, Detour’s management has already partially conceded some of his concerns by replacing two of its directors this summer.
It also added at least one director whom Paulson could support. More recently, it recommended the ouster of an additional two directors, meaning four out of the eight directors on the board when Paulson launched his campaign this summer are likely to be replaced.
While that isn’t the majority Paulson has campaigned for, it is an outcome that would give both sides cover to claim victory. “Paulson’s campaign for change has already had a positive impact,” Marcelo Kim, the partner at Paulson & Co. leading the campaign wrote in a letter to shareholders last month.
It noted that since Paulson first went public with his calls for change at Detour this June, the company has outperformed the S&P/TSX Global Gold Index by 17 per cent after trailing it for several years.