The victory may encourage other shareholders to seek change: On the same day, Waterton Global Resource Management said it is seeking board changes in Hudbay Minerals
In one of the largest victories for shareholders in recent years, the U.S. billionaire John Paulson led a proxy battle that ousted five out of eight targeted board members at Toronto-based Detour Gold Corp.
The campaign, which started this July when Paulson’s hedge fund requisitioned a shareholder meeting, came to a conclusion on Thursday morning when interim chief executive Michael Kenyon resigned having been voted off the board along with the chair Alex Morrison and three others.
Detour’s stock edged up 0.55 per cent on Tuesday morning to $10.92. “They clearly misjudged their shareholder base,” said Kai H.E. Liekefett, a partner at Sidley Austin in New York who has been involved in more than 50 proxy battles. “They maybe didn’t take the fight as seriously as they should have.”
The victory may encourage other shareholders to seek change. In fact on the same day, Waterton Global Resource Management, a private equity firm that controls 10 per cent of Hudbay Minerals Inc., announced it will run its first-ever proxy fight by nominating an independent slate of directors to replace a majority of the current board.
The Detour management shake up also marks an extremely rare instance in which a majority of the board changed as a result of a proxy battle, Liekefett said. In most proxy contests, the shareholder is seeking to gain a minority of the board meaning one to three seats.