It won’t take as long as the U.S. presidential election, nevertheless the battle for your minds and hearts of shareholders of Taseko Mines, underway for two months, has 8 weeks to operate prior to the final showdown on May 10.
And halfway through, Chicago-based shareholder Raging River Capital – that’s leading the charge to own its four director nominees elected, a part of an agenda to change Taseko’s direction – argues its campaign comes with an impact.
In a job interview Friday, Mark Radzik, managing partner of Raging River, said “you understand that you’ve hit the very best spot when you are getting a violent reaction. And we’re because of the fact,” added Radzik when talking about the volley of releases, some corporate governance changes and amendments having a corporate policies made by Taseko, a business that is representative of Raging River’s entry into Canadian proxy battles.
Radzik argues the Taseko the fact is part of its plan “to distract in the real issues” they argues are poor stock price performance (in the last 5 years the shares have declined by almost 90 %); and company governance.
“Underperformance is often the symptom, not the key reason,” said Radzik. “I would posit this is because insider deals and conflicted directors.”
Earlier he was quoted saying “making preferential, related party deals inside a difficult macro cycle further destroys shareholder value.” By his calculations, within the last 3 years Taseko has spent $28 million in “investments to related companies and costs.”
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Radzik was referring to the function taken part in Taseko played by Hunter Dickinson (a private company which has “acquired, advanced and developed mineral properties,” for Thirty years and which employs some Taseko executives) as well as the company’s late 2014 acquisition of Curis Resources. Radzik claimed Friday purchasing that “near bankrupt company, employing a technology that’s not tested,” was “ridiculous.”
In fact, if Radzik wins the proxy battle it’s not inconceivable he might supply the Curis mine towards the executives who organized the acquisition – once they give the $100 million valuation. “It’s a difficult situation, the greater they argue it’s not worth $100 million, the larger they indict themselves.”
His firm, which has a 5.1 % equity stake along with a 7.95 % curiosity about a Taseko bond issue – both bought late last year – added shareholders, plus a amount of long-suffering retail investors, also have reached out.
One institutional manager Vertex One Asset Management having a 3.1 per stake, said hello “would be supportive of Raging River’s intend to focus Taseko’s business strategy, measure the relationship with Hunter Dickinson and address Taseko’s balance sheet.”
So if Raging River, which said “it’s a shareholder first,” which has written to Taseko advising against shareholder dilution and contains given to backstop a rights offering, wins so what can Taseko seem like very quickly? Radzik said it is really a few “getting the most effective strategy (by) concentrating on the core operating assets, and re-engaging while using First Nations to make sure that we build trust.”
Taseko said Friday they like a significant bondholder, Raging River includes a conflict. “Raging River’s nominees may be incentivized to accelerate repayment of Taseko’s debt by liquidating Taseko’s assets, even at the end of the market.”
Taseko added it “benefits from Hunter Dickinson’s quality and cost-effective services. Taseko’s disclosure is transparent and the relationship follows proper governance. There isn’t any conflict.”
Financial Post
bcritchley@nationalpost.com
