NEW YORK (Reuters) - Methanex Corp, the world’s largest methanol producer, said on Friday that it had reached a settlement with M&G Investments in which the Canadian company handed two board seats to its biggest investor.
The company said Paul Dobson, one of four directors proposed by the investor, will join the board at the April 25 annual meeting. Another director will join the board after the meeting and will be picked from a list submitted by M&G Investments.
M&G Investments, which owns 16.5 percent of Vancouver-based Methanex, earlier this month questioned the board’s independence and wrote in a public letter to shareholders that the board does not have people who are willing to challenge management.
Dobson, the interim chief executive of transmission and distribution provider Hydro One Limited, will join the Audit Finance and Risk Committee. To make room for Dobson, Howard Balloch will step down from the 11-member board, the company said.
The settlement comes less than two weeks before shareholders were scheduled to vote on the matter.
M&G is among a growing number of asset management firms now pressing for changes at their portfolio companies, willing to flex their muscles a little more in an area long dominated by so-called activist hedge funds.
As part of the settlement, the company also a agreed to hire an independent financial advisory firm to assist in the financial review of its Geismar 3 project. M&G has said that the company’s plans to possibly building a third methanol plant at its Geismar complex would be too risky without the help of a partner.
Reporting by Svea Herbst-Bayliss; editing by Jonathan Oatis