VANCOUVER, British Columbia--(BUSINESS WIRE)--Mount Kellett Capital Management LP (“Mount Kellett”) today announced that Institutional Shareholder Services Inc. (“ISS”) issued a report recommending that shareholders of Baja Mining Corp. (TSX: BAJ) (OTCQX: BAJFF) (“Baja”) vote FOR the addition of both of Mount Kellett’s nominees to Baja’s board of directors at the Special Meeting of Shareholders to be held on April 3, 2012.
“We fully agree with ISS that change is needed at Baja, and we appreciate its support of our two highly qualified nominees, both of whom have the best interests of Baja and all of its shareholders as their top priority,” said Jonathan Fiorello, Chief Operating Officer of Mount Kellett. “Baja’s board has a track record of problematic corporate governance that is inconsistent with its fiduciary duty to shareholders. We look forward to the support of our fellow shareholders at the special meeting, where they will finally have the opportunity to put an end to Baja’s pattern of self-dealing and ensure that their investment is protected.”
In its March 21, 2012 report, ISS stated*:
About the Need for Change at Baja
- “Based on the evidence of problematic governance practices in the recent past – including exorbitant equity grants to directors, the CEO's troubling willingness to take an active role in what is supposed to be a completely independent Nominating Committee, and the reactive nature of the governance provisions the board has recently adopted – the dissident has made a compelling case that change is warranted at the board level.”
About the Board’s Questionable Stock Options Grants
- “Such large grants may call into question directors’ ability to provide effective oversight of management’s compensation and activity, since their interests may be more aligned with executives than shareholders.”
- “For example, the proposed amendment to the 2011 stock option plan is being proposed only after it was used to make exorbitant grants to directors. One might legitimately question whether closing the barn doors after all the horses have escaped is the best approach to managing an equity plan.”
About the Current Board’s Troubling Corporate Governance
- “While the board's actions to resolve problematic governance practices are noteworthy, these actions appear largely reactive to the dissident's critique, raising the question of whether the board has fully internalized the view that corporate governance is critical for building the confidence of unaffiliated shareholders.”
- “Moreover, the timing of certain changes calls into question the board's motivation for making these changes.”
About Baja’s Mischaracterization of Mount Kellett’s Motives
- “Accordingly, the company's assertion of “creeping takeover” lacks credibility.”
- “There is, however, no evidence Mount Kellett has previously executed a creeping takeover strategy, or that it has ever launched a hostile bid for any of its portfolio companies. The dissident, moreover, made this point explicitly to the board in its May 2011 presentation. In that presentation, Mount Kellett pointed out that it does not commence hostile transactions or buyouts and is only interested in creating maximum value for all shareholders.”
About the Strength of Mount Kellett’s Nominees
- “As the largest shareholder of Baja, Mount Kellett's interests are likely highly aligned with those of other shareholders.”
- “Additionally, Waisberg's depth of corporate governance knowledge, as a certified ICD graduate, and experience, on numerous other public boards, should allow him to contribute considerably to the effective oversight of the Baja board.”
- “Accordingly, votes on the dissident BLUE card are warranted: FOR items 2, 3, and 4 (which call for expanding the board to nine, and adding dissident nominees Lehner and Waisberg to the board).”
Mount Kellett urges its fellow shareholders to vote their BLUE proxy card to elect Mr. Stephen Lehner and Mr. Lorie Waisberg, two highly qualified, independent candidates, to the Baja board of directors. Once elected, Messrs. Lehner and Waisberg will represent a minority of the board and will work with the other directors to provide much-needed independent oversight and an owner-driven mindset. Mount Kellett continues to believe that Giles Baynham and Gerald Prosalendis – two hand-picked directors who are very much entangled in Baja’s web of conflicts – should be removed from Baja’s board.
For more information on how to vote your BLUE proxy, as well as access to other important materials, please visit www.ShareholdersForBaja.com. If you have any questions and/or need assistance in voting your shares, please call Kingsdale Shareholder Services at 1-888-518-1562 or 1-416-867-2272 (collect calls accepted).
About Mount Kellett Capital Management LP
Mount Kellett is a multi-strategy private investment firm focused on global value, special situations and opportunistic investing. The firm has approximately 100 employees with offices in New York, Hong Kong, London, and Mumbai. The firm currently has in excess of $6 billion in assets under management.
* Permission to quote from the ISS report was neither sought nor obtained.