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Ex-gov, Hedge Fund Target Mont. Mining Company

McAllister received $5.6 million in salary, stock and other compensation in 2011.

Schweitzer said his interest in Stillwater was first sparked by news of that letter, which prompted him to contact the hedge fund soon after leaving office.

The company's stock price has dropped by about two-thirds since it peaked at $40 in March 2000.

The stock generally tracks with precious metals prices, but fell sharply after the 2011 purchase of Peregrine Metals and its assets in the Andes of Argentina.

For the takeover bid to succeed, Schweitzer and the Clinton group will have to convince other company investors to get on board.

But the reaction to the Peregrine purchase could be a signal of what's to come, said Rick de los Reyes, who manages an investment fund at T. Rowe Price Group that holds Stillwater shares.

"The type of asset they went after makes no sense," de los Reyes said of the Peregrine purchase. "It's a completely undeveloped area in the far reaches of Argentina, with no power, no water. The nature of that is just ridiculous for a company that's been focused on a palladium mine in Montana."

Directors at Stillwater currently make about $200,000 a year, a compensation level that Clinton Group Managing Director 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 he would be paid as a director if the takeover is successful.

Stillwater's net income fell by 72 percent, to $33 million, through the third quarter of 2012. The company chalked up the decline to lower precious metals prices.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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