NEW YORK, Dec. 20, 2012 /PRNewswire/ -- Clinton Group, Inc. ("Clinton") announced today that it has sent a letter to the board of directors of Stillwater Mining Company (NYSE: SWC) demanding changes to the strategy, operations and management of the Company. Clinton Group owns a significant stake in the Company.
The letter critiques the current management team and Board for a series of strategic missteps and bad acquisitions; operating with a bloated cost structure and marketing budget; and for issuing a high cost-of-capital convertible bond in October. The letter goes on to demand the Board take seven steps to improve the cash flow and operations of the business.
The letter also expresses the Clinton Group's view that the Company is undervalued and that taking the steps outlined in the letter can help stockholders realize fair value for the stock. The Clinton Group's valuation analysis concludes that fair value is approximately $21-23 per share.
The complete text of the letter sent by Clinton Group to the board of directors of Stillwater Mining is attached.About Clinton Group, Inc. Clinton Group, Inc. is a Registered Investment Advisor based in New York City. The firm has been investing in global markets since its inception in 1991 with expertise that spans a wide range of investment styles and asset classes. [Clinton Group Letterhead] Board of Directors Stillwater Mining Company 1321 Discovery Drive Billings, MT 59012
Lady and Gentlemen: I write on behalf of Clinton Group, Inc., which is the investment advisor to various partnerships and investment vehicles (collectively "Clinton Group") that own a significant stake in the Stillwater Mining Company (" Stillwater" or the "Company"). Clinton Group is an enthusiastic owner of Stillwater stock and believes the Company has assets and a market position that entitles it to generate significant free cash flow going forward. The Company is the best positioned Platinum Group Metals ("PGM") producer, with significant in-situ value and a low cost of production, coupled with the most stable political and labor dynamics of any of the major producers. With strong growth likely in key end markets, especially in the auto market as the penetration of cars deepens in emerging markets, we are bullish on palladium and the future of Stillwater. But despite these solid fundamentals, the stock has performed poorly in the last couple of years and is significantly undervalued today. The stock is down 45% in the two years ended November 30, 2012, and trades at a substantial discount to the peers on the most relevant metrics. Even at these low stock prices, half of the covering analysts have a neutral or sell recommendation and 14% of the float is sold short. We believe we know why.
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