(Adds details, activist investor comment, share price move)
By Euan Rocha
TORONTO, March 31 Canadian miner Sherritt
International Corp on Monday urged its shareholders to
back its slate of nominees for the company's board of directors
over a slate put forward by activist investor George Armoyan.
Sherritt filed its proxy circular on Monday, and in a letter
to investors Chairman Harold Stephen assailed Armoyan as someone
with no experience in Sherritt's lines of business, and said
Armoyan has a poor track record on corporate governance matters
and no credible new ideas for creating value beyond what
management is already doing.
Armoyan is chief executive of Clarke Inc, a
Halifax, Nova Scotia-based investment holding company listed on
the Toronto Stock Exchange.
The announcement came just after Sherritt, a nickel, oil and
gas producer, completed a visit with analysts and investors to
its key growth project, the Ambatovy nickel mine and plant in
Madagascar. Analysts came back with largely positive views on
Ambatovy's prospects, and on Monday a flurry of positive
research reports sent shares of the company up 9 percent to
C$3.86 on the Toronto Stock Exchange.
"In our view Ambatovy is poised for significant improvements
in production and we expect that this will lift a veil of
uncertainty that has overhung the share price for the past five
years," TD Securities analyst Greg Barnes said in a note to
Barnes, who raised his share price target to C$4.50 from
C$3.50 and boosted his rating to "buy" from "hold," said the
company's plan to pay down part of its outstanding debt is also
a positive catalyst.
"CUT THROUGH THE NOISE"
"The issues we have with the (dissident) nominees are laid
out in the circular, but basically they have no international
experience, mining experience, or large processing experience -
the kind of skills that we were looking for," Stephen said in an
interview with Reuters.
He urged shareholders to "cut through this noise, consider
the qualifications of each group of director nominees and
determine which directors will act in the best interests of
Sherritt and all of its shareholders."
Sherritt is to hold a special shareholders meeting on May 6
to elect its board. The meeting was requisitioned by
shareholders affiliated with Armoyan, including Clarke, which
together beneficially own some 5 percent of its shares.
Sherritt said it is gaining momentum with a disciplined
strategy to pay down debt, cut costs and focus on its core areas
of expertise, but said the dissident slate threatens to weaken
its governance and disrupt its momentum.
In a statement late on Monday, the activist investors said
the company's claims around progress being made are the direct
result of recommendations made earlier by its group.
"The fact is that Sherritt would not have shifted its stated
focus from acquiring assets to debt reduction without the
advocacy of the concerned shareholders," Armoyan said in a
statement. "Sherritt would have no claim to a 'disciplined
strategy' without our intervention."
The activist group also berated Sherritt for "irresponsible
personal attacks" on its nominees, without knowing for certain,
who its final list of nominees will be. The group said it would
name its nominees in the next few days.
(Reporting by Euan Rocha; Editing by Peter Galloway and Leslie