Agrium continues to fight Jana for support in proxy contest

22 March 2013 17:14  [Source: ICIS news]

HOUSTON (ICIS)—Tensions between Canadian fertilizer producer Agrium and activist hedge fund Jana Partners over control of the company continued on Friday as Agrium made another round of counter arguments against the proposed plan to replace directors and separate segments of the business.

In a statement released on Friday, Agrium asserts that Jana is providing misleading information in regards to performance, share gains and how their campaign could increase shareholder value.

“Jana continues to promote the portfolio-weighted composite that is not used by any of the 29 equity research analysts that cover Agrium. Agrium has maintained from the very beginning that Jana’s portfolio-weighted composite is not a measure of performance that Agrium uses or accepts,” Agrium said in the press release.

“Jana cannot claim credit for Agrium’s share price gains over the last year. This is an empty claim that ignores the fact that Agrium has reported record earnings in each of the past two years.”

Since the onset of the proxy battle the crux of Agrium’s stance has been a consistent rejection of Jana’s assertion that the company is being mismanaged and has misrepresented overall performance to shareholders.

The hedge fund has also challenged the company to break apart its retail sector from the wholesale fertilizer segment based on their viewpoint that it has underachieved. The largest shareholder with a 7.5% stake, Jana has additionally campaigned for the replacement of board members with their five nominees.

Earlier this week, both sides sought the input of US proxy advisory firm Institutional Shareholder Services (ISS), which is set to make a recommendation soon on whether investors should side with the current board or choose the dissident nominees.

As it stands, Jana has not been effective in winning supporters as three different entities have publicly pronounced their decision to back Agrium over the last week.

The first was British Columbia Investment Management, which holds about 1% of stock, who said that they are siding with the producer.

That decision was followed by the announcement that the Montreal based investment firm Letko, Brosseau & Associates, which holds 1.2% of shares, will be voting in favour of the current board.

On Thursday US based shareholder advisory firm Egan-Jones said their recommendation to investors is that they vote for the Agrium’s slate of directors, as it is their position that the current board provides effective leadership. Furthermore they do not feel that Jana’s effort has made a valid case for a change in structure and strategy.

For their part, Agrium said it is pleased by the backing of the other shareholders, and is eager to have the matter resolved.

“We are gratified by the strong level of support we have received from our shareholders as we look forward to the results of the annual meeting," said Agrium board chair Victor Zaleschuk.

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


By: Mark Milam



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