M&G Nominates Four to Methanex Board

M&G Investments intends to nominate four directors to the Methanex board at the annual general meeting on Apr. 25, saying it does not believe the Canadian methanol producer is taking its concerns seriously about going alone on the Geismar 3 project.

“We are concerned that there is not sufficient oversight from the independent directors within the boardroom to maintain financial discipline in what is a relatively indebted company in a cyclical business,” said M&G.

Pursuing the project independently would be a “serious mistake,” the investor added, and would transform Methanex from a “stable, conservatively-financed, growing business into a high-risk leveraged bet on the methanol price.” This would threaten M&G’s entire investment.

M&G’s candidates are Lawrence Cunningham, law professor at the US George Washington University; Paul Dobson, CEO of Hydro One; Patrice Merrin, former CEO of Luscar; and Kevin Rodgers, Deutsche Bank’s former global head of foreign exchange trading. These four, if elected, would encourage the Methanex board to take a fresh look at its future, M&G said.

Methanex said it was “extremely disappointed” in M&G’s approach, noting that the investor’s news release contained numerous misstatements, contradictions and factual inaccuracies.

Through an ongoing private dialogue with M&G over the last two years, the Canadian group said it is clear the investor has developed a short-term focus on share buybacks. Based on Methanex’s track record of long-term success and clear strategy for profitable growth, however, there is no case for change.

The methanol producer has nominated 11 directors, 10 of which are independent, including the chair, and four of whom have joined the board since 2016. Commenting on M&G’s nominees, Methanex said none had any experience in the chemicals industry, while three out of the four “have little or no public company board experience.”