Firmly Believes that its Four Nominees Will Provide
Much-Needed New, Independent Voices in Methanex Board Room
Addresses Certain Recent Assertions Made by Company
Vote Today on the BLUE Proxy Card to Elect
M&G's Four Highly-Qualified Nominees to the Board
LONDON, April 3, 2019 /PRNewswire/ -- M&G
Investments, the investment manager of approximately 16.5% of the
shares of Methanex Corporation ("Methanex" or the "Company")
(TSX:MX) (Nasdaq: MEOH) today released the following open letter to
its fellow shareholders.
Dear Methanex Shareholders,
Our public engagement regarding Methanex has been focused on our
concerns related to capital allocation and corporate governance –
namely the Company's risk profile and the Board's oversight of
management. This focus has not changed. Neither has our approach:
we continue to believe that Methanex and its shareholders would
benefit greatly from the addition of new, independent perspectives
to the Board.
M&G's nominees will improve the dynamic in the board
room
Our nominees bring many important skills to the table. One of
the most crucial elements they offer is their independence of
management – and with it a willingness to ensure effective
oversight.
The incumbent Methanex Board includes a number of individuals
with methanol industry experience. We do not dispute that. What we
believe it lacks is people who are willing to challenge management,
ask probing questions and always keep in mind the best interests of
the Company and all shareholders. In our view, these are principles
of good corporate governance that are relevant and apply across all
industries.
The dynamic on the Board needs to change. Electing our four
nominees that we have put forth would improve this dynamic by
adding real independence, as well as specific skill-sets and
expertise – in the areas of governance, finance and commodities –
that will prove valuable.
Our nominees offer the following:
- Lawrence Cunningham –
Independent perspective, corporate governance expert, legal
scholar, Canadian public company board experience.
- Paul Dobson – Independent
perspective, extensive energy experience, interim CEO of a Canadian
public company.
- Patrice Merrin –
Independent perspective, commodities experience, expertise with
large-scale capital projects, high-level governance skillset.
- Kevin Rodgers –
Independent perspective, commodity cycle experience, finance,
leverage, chemistry degree.
To be clear, we are not asking for control of the Methanex
Board. We are asking that four new directors, entirely independent
of both management and us, and not beholden to us in any way,
replace four directors who have each served over 12 years on the
Board.
Setting the record straight
In their recent letter, Methanex made several incorrect
assertions about M&G's intentions. Here are the facts:
- As Methanex's latest letter makes clear, the Company
essentially agrees with M&G's view that finding a suitable
strategic partner for Geismar 3 that delivers more than just money
is their preference. This goes a long way towards justifying
our argument that it is critical the Company has a strategic
partner for this project.
- M&G's limited share sales were entirely necessitated by
internal compliance concerns. Specifically, the only reasons we
sold Methanex shares were to satisfy our fund concentration limits
and internal risk controls related to total share of firm ownership
of a given company. These share sales were not a reflection of our
view of the outlook for Methanex, and in fact the Company remains
by far the largest holding in M&G's Global Dividend Fund.
- M&G is not pushing for the removal of CEO John Floren. To be clear, we support
investment in further capacity, but we do not support taking on
undue risk that would make Methanex extraordinarily dependent on
the price of methanol. Our nominees will offer meaningful help to
the CEO.
- We are not trying to micromanage the CEO's operational
decisions – rather, we are pushing for a Board that
exercises more active oversight of management and risk. Our
main concern with Geismar 3 is the high level of potential
financial risk in the event of a period of weak methanol pricing
during the project's construction – which we believe is potentially
so large that this has become a governance and oversight issue. We
support the project as long as risk is shared. In our view, the
risk of pursuing the project alone, and the fact that the Company
is in danger of handcuffing itself financially on a long-term
basis, highlight the urgent need for changes on the Board.
A critical choice for long-term value
M&G is not an activist or a hedge fund. It is a respected
institutional money manager that has not conducted proxy contests
in the past. As a traditional, long-only investor M&G is
helping to manage the long-term savings of millions of people
across Europe, Asia and the Americas and we understand deeply
the importance of careful stewardship of capital and management of
risk. And, as an 85-year old institution that has held a number of
our positions in companies for decades, we bring a long-term
perspective to bear on our investments.
We own 16.5% of Methanex and have held this investment for over
a decade.1 Our aim is to discourage Methanex from taking
on excessive risk and we intend to continue to hold our investment
in Methanex for the long-term.
M&G has provided its fellow shareholders with the
opportunity to replace four directors – Bruce Aitken (an ex-CEO of Methanex),
Howard Balloch, Phillip Cook and Janice
Rennie – each of whom has served more than 12 years on the
Board and therefore would potentially no longer qualify as
independent under most corporate governance regimes, such as in the
UK (where a director having served on a board for more than nine
years is specifically listed by the Corporate Governance Code as a
factor indicating a lack of independence), and one of whom was an
executive director of Methanex – with four outstanding nominees,
who are independent, experienced, will challenge management and act
in the interests of all shareholders.
Please vote on the BLUE proxy card for the
election of Lawrence Cunningham,
Paul Dobson, Patrice Merrin and Kevin
Rodgers, for the Board of Methanex.
If you have any questions or need assistance in voting your BLUE
proxy card, please call our proxy solicitor, D.F. King &Co.,
Inc., at (800) 864-1460 (toll-free) or (212) 269-5550 (call
collect).
Sincerely,
Stuart Rhodes
Fund Manager
M&G Investment Management
About M&G
M&GPrudential has c. $338 billion of assets under management (as at
Dec 2018) and has more than 7 million
customers in the UK, Europe,
Asia and the Americas including
individual savers and investors, life insurance policy holders and
pensions scheme members.
Investor Contact
D.F. King & Co., Inc.
Edward McCarthy / Geoffrey Weinberg: 1-212-269-5550
Media Contact
Sloane & Company
Dan Zacchei / Joe Germani: 1-212-486-9500
E-mail: Dzacchei@sloanepr.com
JGermani@sloanepr.com
Required Information Under Canadian Law
Information in Support of Public Broadcast Exemption
M&G Investment Management Limited (MAGIM) is relying on the
exemption under section 9.2(4) of National Instrument 52-102 –
Continuous Disclosure Obligations to make this public
broadcast solicitation. The following information is provided
in accordance with corporate and securities laws applicable to
public broadcast solicitations. This solicitation is being
made by MAGIM, and by M&G Global Dividend Fund and M&G
(Lux) Investment Funds 1 (collectively, "M&G"), and not by or
on behalf of the management of Methanex Corporation
("Methanex"). The head office of Methanex is 1800 Waterfront
Centre, 200 Burrard Street, Vancouver,
British Columbia, V6C 3M1.
MAGIM has filed an information circular dated March 25, 2019 (the "M&G Circular")
containing the information required by Form 51-102F5 –
Information Circular in respect of its proposed nominees for
election at the upcoming annual meeting of Methanex shareholders on
April 25, 2019 (the "Annual
Meeting"). The M&G Circular is available on Methanex's
company profile on SEDAR at http://www.sedar.com.
Proxies may be solicited by proxy circular, mail, telephone,
telecopier, email or other electronic means, as well as by
newspaper or other media advertising and in person by managers,
directors, officers and employees of M&G who will not be
specifically remunerated therefor. In addition, M&G may
solicit proxies by way of public broadcast, including press
release, speech or publication and any other manner permitted under
applicable Canadian laws. M&G may engage the services of
one or more agents and authorize other persons to assist it in
soliciting proxies on behalf of M&G. The costs incurred
in the preparation and mailing of the M&G Circular or proxy
solicitation will be borne directly and indirectly by
M&G. M&G has not yet determined whether it intends to
seek reimbursement from Methanex of such solicitation expenses.
M&G has entered into an agreement with D.F. King & Co.,
(D.F. King) pursuant to which D.F. King has agreed that it will
provide certain consulting and related services, including acting
as M&G's proxy solicitor. Pursuant to this agreement,
D.F. King will receive an initial fee of $10,000 and an additional fee of $200,000 upon the mailing of final proxy
materials, plus an additional fee for telephone calls and
telecommunication charges in an amount to be agreed upon by the
parties. In addition, D.F. King may be entitled to a success
fee on the successful completion of a solicitation, as determined
by M&G in consultation with D.F. King.
Proxies may be revoked by a registered holder of Methanex shares
(i) by completing and signing a valid proxy bearing a later date
and returning it in accordance with the instructions contained in
the accompanying form of proxy; (ii) by depositing an instrument in
writing executed by the shareholder or by their attorney authorized
in writing, as the case may be: (a) at the registered office of
Methanex at any time up to and including the last business day
preceding the day the Annual Meeting or any adjournment or
postponement of the Annual Meeting is to be held, or (b) with the
Chairman of the Annual Meeting prior to its commencement on the day
of the Annual Meeting or any adjournment or postponement of the
Meeting; or (iii) in any other manner permitted by law. Proxies may
be revoked by a non-registered holder of Methanex shares at any
time by written notice to the intermediary in accordance with the
instructions given to the non-registered holder by its
intermediary.
None of MAGIM, M&G Global Dividend Fund or M&G (Lux)
Investment Funds 1 or any of their associates or affiliates (i) has
any material interest, direct or indirect, by way of beneficial
ownership of securities of Methanex or otherwise, in any matter to
be acted upon at the Annual Meeting, other than the election of
directors, or (ii) has had any material interest, direct or
indirect, in any transaction or proposed transaction since the
commencement of Methanex's last financial year that has materially
affected or would or could materially affect Methanex or any of its
subsidiaries.
1 Methanex has been the largest holding in M&G's
Global Dividend Fund since February of 2015. Methanex's shares have
underperformed by -10% relative to the MSCI World Index since
then.
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SOURCE M&G Investments