CORRECTED-UPDATE 1-Proxy advisers split on miner Augusta's takeover defense
(Corrects company name in eighth paragraph to Augusta from HudBay)
By Allison Martell and Euan Rocha
TORONTO, April 17 (Reuters) - Two prominent proxy advisers have split on whether shareholders should vote to maintain Augusta Resource Corp's shareholder rights plan, which could thwart a hostile takeover bid from larger Canadian base metals miner HudBay Minerals Inc.
Glass Lewis has advised its clients to vote to preserve the plan, while rival Institutional Shareholder Services (ISS) has come out against the plan. ISS also sharply criticized the amount of severance that could be paid to Augusta's chief executive if HudBay's bid succeeds.
Investors will vote on whether to cancel the rights plan at Augusta's May 2 shareholder meeting. Without the plan, HudBay's bid, which expires May 5, would be more likely to succeed.
Shareholder rights plans, often called poison pills, are designed to make hostile takeovers difficult.
HudBay wants control of Augusta's Rosemont project in Arizona, seen as one of the most promising copper projects in the United States. Augusta said in March that nine parties had expressed some interest in the company.
In its report, which was viewed by Reuters, Glass Lewis said it believes that rights plans are generally "not conducive to good corporate governance," but that it supports limited plans in some circumstances.
Poison pills can give directors more time to seek out friendly bidders, boosting payouts to investors. Continued...