Brian Schweitzer

Schweitzer, Stillwater Mining board under investigation

A pair of New York City law firms have launched an investigation in to proposed acquisition of Montana based Stillwater Mining by Sibanye Gold Limited, a South African company.

Harwood Feffer LLP and Levi & Korsinsky LLP both of New York City have announced that they are investigating  shareholder concerns that the Stillwater Board of Directors breached their fiduciary duties by failing to shop the Company before agreeing to enter into this transaction, and whether Sibanye Gold Limited is underpaying for Stillwater shares. Former Governor Brian Schweitzer serves as Chairman of Stillwater’s board of directors.

Schweitzer takeover

In early 2013, Schweitzer joined with New York hedge fund, the Clinton Group, to lead a hostile takeover of Montana’s largest publicly traded company. Schweitzer’s group contended that the board had mismanaged the company and argued they were putting Montana mining jobs in jeopardy.

After the takeover, longtime Chairman and CEO Frank McAllister was voted out as Chairman of the Board and resigned his position as CEO. Schweitzer took over as Chairman in May 2013 and the company hired Michael McMullen to serve as CEO.

Schweitzer’s tenure has Chairman has been a turbulent one. In 2014, the company laid off 31employees, in 2015 the company moved its corporate headquarters from Montana to Denver, Colorado and the company’s stock price has been a rollercoaster peaking at over $19 per share and going as low as $4.99 per share earlier this year.

Sale to South African Company

Earlier this month the company announced it had reached a deal to sell to South African Mining company Sibanye Gold Limited. Sibayne agreed to pay $18 per share or approximately $2.2 Billion for the company. The acquisition is expected to close in the second quarter of 2017.

The structure of the deal will entail forming of a US subsidiary of Sibanye, which will merge into Stillwater Mining, Stillwater will remain a surviving corporation and will be a direct subsidiary of Sibanye and be delisted from the New York Stock Exchange.

By: Big Sky Headlines staff

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