(Reuters) - Canada’s Hudbay Minerals Inc said on Wednesday that Chief Executive Officer Alan Hair has stepped down after more than 20 years with the company and named Peter Kukielski, who was backed by its second largest investor in a proxy battle, as interim CEO.
As part of its proxy fight, private equity firm Waterton Global Resource Management had nominated five directors to the company’s board. Three of them, including Kukielski, were elected in May following a settlement that ended the drawn-out battle.
Much of Waterton’s ire surrounded Hudbay’s reported talks to buy Chile’s Mantos Copper for about $780 million last year and what it described as an erosion of shareholder returns under its management and board.
Bloomberg reported Hudbay’s discussions to buy Mantos mine in October, but the company did not confirm the talks.
Although Waterton, which held a 12.09% stake in the company as of May 3, eventually dropped its call for Hair to be replaced by Kukielski, his appointment as interim CEO is a win of sorts for the activist shareholder.
“While Mr. Kukielski has been named as interim CEO and a search for a permanent CEO has been launched, there is the possibility that Mr. Kukielski could ultimately be named permanent CEO,” analysts at TD Securities wrote in a note.
“Nothwithstanding Mr. Kukielski’s role with Hudbay, an incoming CEO is likely to make changes to the senior team at the company,” they added.
Shares of Hudbay have risen nearly 19% during Hair’s tenure as CEO, which started in 2016 after a four-year stint as chief operating officer. The S&P/TSX Global Gold index soared 68% in that time.
The company said Hair’s departure does not affect its strategic or financial outlook. Hudbay does not have a time frame for naming a permanent CEO, a spokesman told Reuters.
Hudbay shares rose 3.5% to C$6.50 in morning trade in Toronto, compared with a 0.7% gain in the S&P/TSX Global Gold index.
“I think the sudden nature in which he stepped down would come as a surprise ... “ National Bank Financial analyst Shane Nagle said.
Kukielski most recently served as CEO of Canadian miner Nevsun Resources, which was bought by China’s Zijin Mining Group Co Ltd in a C$1.86 billion deal.
The companies said in May that Hudbay would also seek a successor to Chairman Alan Hibben following its shareholder meeting that month. Hibben will remain on the board until the 2020 shareholder meeting, they said.
Reporting by Nichola Saminather in Toronto and Debroop Roy in Bengaluru; Editing by Arun Koyyur and Jeffrey Benkoe