Paulson Calls For Sale Of Detour Gold, Cites Low Stock Price
(Kitco News) - Paulson & Co, led by billionaire hedge-fund manager John Paulson, is urging for underperforming Canadian miner Detour Gold Corp (TSX: DGC.TO) to put itself up for sale, citing lapses in management and low stock price.
“We strongly believe you should explore all strategic alternatives, including a sale of the company,” John Paulson and Marcelo Kim, a partner at Paulson & Co, said in a signed letter to Detour’s board.
The letter, which was obtained by Kitco News, also stated that Detour’s board “failed” to recruit a proper management team that could oversee operations at the Detour Lake mine and ensure returns to shareholders.
“Under your direction … the stock price of the company has severely underperformed its peers,” the letter said. “The company’s stock price today of C$10.58 is 44% below your own stated NAV of C$19 per share.”
Paulson & Co., which owns a 5.4% stake in Detour, is not alone in wanting to see a sale happen, with other shareholders, including Mackenzie Investments, Franklin Templeton, VanEck, and Tocqueville Asset Management, also on board, according to Bloomberg.
“At this point, it is incumbent on you to see if other companies are ready to pay a full and fair price for the company,” Paulson and Kim wrote.
Detour’s stock was last seen trading at $10.97, up 5.58% on the day. However, the yearly performance is not as impressive, with the stock falling 33%, with the majority of losses witnessed in late-April.