BILLINGS, Mont. (AP) -- A former Montana governor considered a dark horse candidate for the 2016 Democratic presidential nomination has joined a hedge fund's attempt to take control of the state's largest publicly-owned mining company.
Less than two months out of office, Democrat Brian Schweitzer said he's intervening to save Stillwater Mining Co. from questionable foreign expansion plans he says could leave its 1,500 Montana jobs at risk.
A New York-based hedge fund, the Clinton Group, submitted formal notice to Stillwater on Monday of its bid to oust the precious metals company's board of directors. If Schweitzer and the Clinton Group can persuade enough investors to support them, the current board would be replaced with a new slate that includes Schweitzer.
The hostile takeover bid answers, at least in part, what's next for the effusive ex-governor.
That question has been on the lips of many political pundits, with Schweitzer demurring and never completely stamping out speculation of anything from a primary challenge to Democratic Sen. Max Baucus in 2014 to a long-shot bid for his party's 2016 presidential nomination.
The 57-year-old former governor brushed aside questions about his political future in an interview. For now, he said he's committed to reviving the fortunes of one of Montana's most high-profile companies.
"I've got some time on my hands and I'd like to help turn this company around. It's an important company to Montana and it's an important company to me," Schweitzer said. "You've got a company that's draining its equity, and you can't run a mine if you don't have any money and don't have equity."
In a statement issued Monday, Stillwater said the Clinton Group had "minimal experience in the mining industry" and failed to recognize the company's "positive momentum." Stillwater also said it had taken steps to ensure the company benefits from market trends, but did not offer specifics.
The Billings-based company operates the only platinum and palladium mines in the U.S., deep beneath southern Montana's rugged Beartooth Mountains.
Buoyed by high precious metals prices, Stillwater made two major purchases in recent years that executives said were designed to diversify its holdings. Those purchases were a palladium, copper and gold reserve in Canada, worth $118 million when it was announced, and a copper and gold reserve in the Andes of Argentina initially valued at $450 million.
The company has since revealed that the palladium content of the Canadian reserve was overestimated. And the copper deposit in Argentina could cost up to $2.5 billion to develop, a questionable prospect in a country with unsettled politics that have prompted other companies to stay out, Schweitzer said.
Stillwater last year sold a 25 percent stake in its Marathon project in Ontario to Mitsubishi Corp. for $81 million. Mining is expected to begin in 2017.
Without a change in course, the governor said, Stillwater potentially faces the same fate that befell Montana's legendary Anaconda Mining Co. That copper industry giant cratered after the Chilean government took over much of its foreign assets in the 1970s, leading to large-scale layoffs among Montana miners.
The former Montana governor owns 25,000 shares of Stillwater, worth roughly $325,000 at current prices, according to documents provided by the Clinton Group. He bought the stock after leaving office, between Jan. 23 and Feb. 20.
The Clinton Group holds almost 1.3 million shares, giving it a 1 percent stake in the company.
On Monday, Stillwater shares dropped 14 cents on the New York Stock Exchange to $12.85, a loss of about 1 percent.
The overwhelming majority of the platinum and palladium mined by the company is used by automotive companies in catalytic converters, which help control pollution.
Schweitzer said he wants the company to consider putting the foreign assets up for sale, particularly its property in Argentina. That comes after the Clinton Group in a December letter called for the retirement of Stillwater Chairman and Chief Executive Officer Frank McAllister.
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.