US hedge fund to press Agrium to discuss possible break-up

15 August 2012 16:16  [Source: ICIS news]

TORONTO (ICIS)--US hedge fund JANA Partners will be pressing Canada’s Agrium at a meeting this week to talk about the possibility of breaking up the Canadian fertilizer major into separate wholesale and retail businesses, it said on Wednesday.

However, Agrium investor relations vice president Richard Downey told ICIS that Agrium continues to firmly rule out suggestions that the company be split up.

Downey confirmed Canadian media reports that Agrium CEO Mike Wilson would be in New York this week to meet with  JANA. The meeting had been scheduled three weeks ago and Wilson would be in the city for other meetings. It was wrong by media to imply that the CEO was travelling all the way from Calgary, Alberta, to New York just to meet JANA, he said.

"I don’t expect there will be any news from that meeting," he added.

Downey also rejected claims by JANA that Agrium’s management lacked experience in managing its retail business.

“We have been in the retail business for 50 years, I don’t know how long they [JANA] been in the retail business,” Downey said.

In a statement, JANA said that Agrium’s conglomerate structure is preventing the company “from recognising its true value potential over a long-term period.” A stand-alone Agrium retail business would “unlock significant long-term value” for Agrium shareholders, it said.

JANA added that since Agrium acquired retailer UAP in 2008 – “which was the start of a $4bn acquisition binge in retail” - the company's shares underperformed those of pure-play fertilizer firm CF Industries. In 2010, Agrium failed in a bid to take over US-based CF Industries.

Agrium's share price was up 1.1% at $97.91 on the New York Stock Exchange.

By: Stefan Baumgarten
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