BILLINGS, Mont. (AP) -- Shareholders in Montana's largest publicly owned company gather in Nye Thursday to decide whether a group of dissident investors — headlined by former Gov. Brian Schweitzer — should take control of Stillwater Mining after the company's costly pursuit of overseas assets.
Schweitzer and the Clinton Group, a New York hedge fund, charge that mismanagement by the company board and its chairman, Chief Executive Officer Frank McAllister, has put more than 1,600 Stillwater jobs at risk.
McAllister counters that the dissidents want to take over the company on the cheap as it's poised to expand production at its platinum and palladium mines in the Beartooth Mountains north of Yellowstone National Park.
The maneuvering for votes has been reminiscent of a political election, complete with dueling public relations campaigns. For Schweitzer, it could be a prelude to a possible run to replace fellow Democrat U.S. Sen. Max Baucus, who announced last month he's stepping down in 2014 after six terms.
The Clinton Group controls roughly 1 percent of Stillwater stock. But its bid to oust a majority of Stillwater's eight-member board has been bolstered by support from two investment research firms, whose recommendations were expected to influence institutional investors with large enough stakes in the company to decide the dispute.
As late as Wednesday, both sides worked on a possible settlement that would have retained at least some members of the current board.
But Schweitzer's side rejected a proposal to split the board evenly, saying Stillwater was attempting to manipulate the vote by offering an unworkable solution. The former governor said Thursday that nothing short of the ouster of McAllister would be acceptable for his side.
The company wanted to keep McAllister and added that an evenly split board would offer "the worst governance you could imagine," he said.
Stillwater refuted Schweitzer's description, saying its proposal would separate the CEO and chairman positions and launch an immediate search for a new CEO. Incumbent board member Patrick James said Thursday's meeting would proceed as planned.
Stillwater, with a market value of more than $1.3 billion, runs the only platinum and palladium mines in the United States. The company reported a net income of $43 million in 2012 based on revenues of $800 million.
Analyst John Bridges with J.P. Morgan said the best outcome for shareholders would be the re-election of at least some current board members, given their knowledge of precious metals mining.
Yet Bridges added that the company's board and management should face "consequences" over the 2011 decision to pay $450 million for a vast reserve of copper in Argentina. That project has been panned by some Stillwater investors because of political uncertainty in the country and the billions of dollars that would be needed to build a mine.
A second foreign acquisition, the Marathon palladium reserves in Ontario, is considered more promising.
"There have been mistakes at Stillwater and there should be consequences," he said. "I'm scared by the concept of a whole new board having to come in and learn how to operate these difficult assets in Montana and learn the ins and outs of the palladium business."
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