Detour Gold Corp said on Thursday it agreed to name two of investor Paulson & Co’s nominees to its board as it looks to end a proxy fight with the U.S. hedge fund that had called for a complete overhaul of the board.
The Canadian gold miner also said its interim chief executive officer would step down as a director and it would start looking for a new CEO once the proxy fight ends.
Paulson & Co, which has a 5 percent stake in the miner, had also called for the company to explore strategic alternatives, including a sale.
Billionaire John Paulson, the hedge fund’s manager, said the company had failed to recruit and oversee a management team capable of operating its main mine in a manner that delivers returns to shareholders, Bloomberg reported in June.
In a letter to shareholders on Thursday, Detour said Paulson’s objective was to “force a fire sale of Detour Gold,” and that the hedge fund changed tack when it “realized that its fire sale narrative would not win this proxy fight.”
Paulson did not respond to an e-mail seeking comments outside regular business hours.
Detour was willing to settle with Paulson in October, offering to name a new chief executive officer and drop a civil claim. Paulson rejected the offer.
Detour has been under attack by other shareholders as well, including U.S. hedge fund Livermore Partners and U.S. investment company Coast Capital Management LP, which have asked for a sale of the company and a rejig of its board.
Investors have until December 7 to vote on board nominees.
(Reporting by Laharee Chatterjee in Bengaluru; Editing by Shinjini Ganguli)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)