This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Statement Of JANA Partners Regarding Agrium Filing

Stocks in this article: AGU





NEW YORK, Aug. 20, 2012 /PRNewswire/ -- JANA Partners LLC today released the following statement in response to a filing made today by Agrium Inc. ("Agrium") (TSX / NYSE: AGU)

"This is more of the same from Agrium's board and management: talking down their own stock price to avoid an honest debate about unlocking full shareholder value and twisting themselves into knots trying to reconcile their past comments with their current obstructionist position. The truth, however, is simple:

  • Agrium's stock price has dramatically underperformed its pure play fertilizer peer CF Industries and a composite of its true pure play retail comparable peers over a multi-year period, regardless of the short-term performance of the company's stock this year.
  • This is due to a combination of factors including Agrium's conglomerate structure, operating underperformance in Retail, high costs, and lack of true retail distribution experience on the board. While it is not surprising that management would quibble with some of the numbers in our analysis given their inside knowledge of the company, absolutely nothing they have said substantively refutes these larger points.
  • Not content to only mischaracterize their own prior comments about the value of Retail, Agrium's board and management now mischaracterizes our comments regarding Retail's trading value, which is as disingenuous as their initial attempt to disavow years of pointing to higher trading multiples, and equally reckless for shareholders. Just like Agrium's board and management before we began our discussions, we believe the Retail business is dramatically undervalued by the market based on comparisons to its most comparable peers. We could not have been clearer on this point in our public and private communications with Agrium and to suggest otherwise is completely false. While it is true that private equity interest would undoubtedly serve as a backstop or even provide a premium to a standalone Retail's market value, we continue to fully believe the market would ascribe significantly greater value to Retail independently than as part of Agrium.
  • It is also astounding that the board and management continue to claim to have done no real analysis of the true value of Retail for years until we pressed them to address the company's underperformance, despite spending billions on Retail acquisitions. Instead of engaging in a constructive discussion about how to further highlight the value of Retail, Agrium's Board instead elected to pursue a scorched earth campaign, creating a set of revisionist, middle of the night comparables to justify the current structure and avoid a real debate.  While the board and management now seek to mislead shareholders regarding our views on this point, we have rejected these revisionist comparables from the start, including in our letter to the board immediately following our meeting last week. In addition, as we made clear in our meeting and the company could not refute, the company's comments about the decline in the S&P since UAP was last publicly traded are completely irrelevant, as both the company's original comparable company set and its revisionist group both trade at or higher than the same multiples as they did at that time.

There is little that is new, but much that is profoundly troubling, in the company's increasingly desperate comments. We look forward to continuing our discussion with shareholders based on the facts, with the goal of unlocking Agrium's true value creation potential for all shareholders."

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs