BILLINGS, Mont. (AP) — A former Montana governor considered a dark horse candidate for the 2016 Democratic presidential nomination has joined a hedge fund's attempt to take control of the state's largest publicly-owned mining company.
Less than two months out of office, Democrat Brian Schweitzer said he's intervening to save Stillwater Mining Co. from questionable foreign expansion plans that could leave its 1,500 Montana jobs at risk.
A New York-based hedge fund, the Clinton Group, submitted formal notice to Stillwater on Monday of its bid to oust the precious metals company's board of directors. They would be replaced with a new slate that includes Schweitzer.
The hostile takeover bid marks the effusive ex-governor's most high-profile move since leaving office due to term limits. And it answers, at least in part, what's next for him.
That question has been on the lips of many political pundits, with Schweitzer demurring and never completely stamping out speculation of anything from a primary challenge to Democratic Sen. Max Baucus in 2014 to a long-shot bid for his party's 2016 presidential nomination.
The 57-year-old former governor brushed aside questions about his political future in an interview. For now, he said he's committed to reviving the fortunes of one of Montana's most high-profile companies.
"I've got some time on my hands and I'd like to help turn this company around. It's an important company to Montana and it's an important company to me," Schweitzer said in an interview. "You've got a company that's draining its equity, and you can't run a mine if you don't have any money and don't have equity."
Stillwater spokesman John Beaudry referred questions to company executives, who did not immediately return calls Monday from The Associated Press seeking comment.
The Billings-based company operates the only platinum and palladium mines in the U.S., deep beneath southern Montana's rugged Beartooth Mountains.
Buoyed by high precious metals prices, Stillwater made two major purchases in recent years that executives said were needed to diversify its holdings. Those purchases were a palladium and gold reserve in Canada, worth $118 million when it was announced, and a copper and gold reserve in the Andes of Argentina initially valued at $450 million.
The company has since revealed that the palladium content of the Canadian reserve was overestimated. And the copper deposit in Argentina could cost up to $2.5 billion to develop, a questionable prospect in a country with unsettled politics that have prompted other companies to stay out, Schweitzer said.
He said that without a change in course, Stillwater potentially faces the same fate that befell Montana's legendary Anaconda Mining Co. That copper industry giant cratered after the Chilean government took over much of its foreign assets in the 1970s, leading to large-scale layoffs among Montana miners.
The former Montana governor owns 25,000 shares of Stillwater, worth roughly $325,000 at current prices. He bought the stock after leaving office, between Jan. 23 and Feb. 20.
The Clinton Group holds almost 1.3 million shares, giving it a 1 percent stake in the company.
Stillwater dropped 8 cents to $12.91, for a 0.62 percent loss, in Monday afternoon trading on the New York Stock Exchange.
The overwhelming majority of the platinum and palladium mined by the company is used by automotive companies in catalytic converters, which help control pollution.
Schweitzer said he wants the company to consider putting the foreign assets, particularly the Argentina reserves, up for sale. That comes after the Clinton Group in a December letter called for the retirement of Stillwater Chairman and Chief Executive Officer Frank McAllister.
Schweitzer said his interest in Stillwater was first sparked by news of that letter and said he approached the firm soon after leaving office.
The company's stock price has dropped by about two-thirds since it hit a high of $40 in March 2000. The share in recent weeks has sold in the $13-$14.50 range.
The stock generally tracks with precious metals prices, but dropped sharply after the 2011 purchase of Peregrine Metals, which controlled the copper and gold reserves in Argentina.
Stillwater last year sold a 25 percent stake in the Canadian reserves, known as Marathon, to Mitsubishi Corp. for $81 million. It said mining is likely to begin in 2017.
Directors at Stillwater currently make about $200,000 a year, a compensation level that Clinton Group Manager Gregory Taxin said was reasonable, given the company's size.
Taxin said Schweitzer was not being paid to be a nominee nor as a consultant, although the former governor would be paid as a director if the corporate takeover is successful.
While the Clinton Group's relatively small stake in the company doesn't guarantee success in its takeover bid, Taxin said recent declines in the share price show other investors also are unhappy with how the company is being run.