Agrium shareholder siding with producer in proxy battle

15 March 2013 22:36  [Source: ICIS news]

HOUSTON (ICIS)--In the first sign that shareholder Jana Partners' plans to win widespread support for replacing directors at Canadian fertilizer company Agrium might be failing, British Columbia Investment Management said on Friday that it is siding with Agrium in the ongoing proxy fight.

Having repeatedly cited its dissatisfaction with Agrium’s leadership and management experience, while touting its value as the largest shareholder with over $1bn (€770m) invested into the fertilizer producer, New York-based Jana wants five directors ousted and to see a change in the company’s strategy.

But it appears that others are not buying into that argument as British Columbia Investment, which holds about 1% of Agrium’s stock, said Jana’s attempts are not in the best interest of long-term shareholders.

“After several meetings with Agrium’s management and directors, as well as representatives of Jana Partners and their prospective board nominees, [British Columbia Investment] has independently concluded that Agrium’s current board provides effective oversight,” said Doug Pearce, chief investment officer.

The activist hedge fund wants Agrium to break its retail sector of the business away from the wholesale fertilizer segment. Jana has also claimed that Agrium’s highly rated share price return is not based on excellent strategy or valued leadership but the result of good fortune within the fertilizer industry.

The five people Jana wants dismissed from the 12-member board are former Agrium chairman Frank Proto, Susan Henry, Derek Pannell, Russell Horner and Mayo Schmidt.

Agrium shareholders will vote on 9 April for the board of directors at the company’s annual meeting in Calgary, Alberta. They can vote for as many or as few candidates as they want but can only select from Agrium’s or Jana’s proxy card.

Market analysts have predicted that due to investor fatigue and the desire to settle the matter that the two sides will reach some sort of settlement, which will result in Jana having some representation on the board.

($1 = €0.77)

By: Mark Milam
+1 713 525 2653

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