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Schweitzer takeover bid gets qualified support

BILLINGS, Mont. (AP) -- A pair of investor research firms say strategic missteps by Montana's Stillwater Mining Co. warrant changes within its board, as a dissident investor group that includes former Gov. Brian Schweitzer seeks to oust the company's leadership.

But the firms stopped short of endorsing the call to entirely replace Stillwater's board of directors. They cautioned that some members of Schweitzer's team lack the necessary experience to run the precious metals mining company.

The recommendations from the two firms — Institutional Shareholder Services; and Glass, Lewis and Co. — can carry sway among large investors during takeover battles like the one being waged over Stillwater.

Schweitzer and his allies at the Clinton Group, a New York hedge fund, said Monday that the firms' recommendations underscore investor unease with the only platinum and palladium producer in the U.S.

They pointed to the huge amounts of money Stillwater has spent on foreign mining projects that now face uncertain prospects, including the Altar copper reserves in the Argentina in 2011.

Stillwater Chairman Frank McAllister said he disagrees with the firms' recommendations, proclaiming in a statement that the company "is the strongest it's ever been," even as other mining companies face declining production.

Those claims were cast into doubt by the reports the two institutional investor firms issued late Friday.

Glass, Lewis and Co. said the purchase of Altar in a bid to diversify Stillwater's holdings "backfired," chasing away investors who were once attracted to the company because of its focus on platinum and palladium. And Institutional Shareholder Services noted that the Stillwater's share price has never fully recovered from a sharp drop experienced after the 2011 deal for the copper reserves in Argentina.