This Day On The Street
Continue to site
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

JANA Partners Unveils Full Agrium Analysis And Proposals To Unlock Value





NEW YORK, Oct. 1, 2012 /PRNewswire/ -- Barry Rosenstein of JANA Partners LLC today set forth publicly for the first time JANA's full case for value-unlocking structural and operational change at Agrium Inc. ("Agrium") (TSX / NYSE: AGU) in a presentation at the 8th Annual New York Value Investing Congress. As it typically does, JANA first presented its arguments privately to Agrium's management and board beginning in May of this year.  In response, Agrium's board and management revised Agrium's historical comparable company set, despite having argued for such comparables themselves for years, to argue against the company's true value potential, a decision which Mr. Rosenstein in his remarks called "outrageous, disingenuous and borderline unethical."  JANA has now therefore set forth its analysis publicly and today urged shareholders to review and decide for themselves whether they want to see Agrium's full value potential realized.  JANA today encouraged all shareholders and other interested parties to review this analysis, entitled "Unlocking Agrium's True Value Potential," at www.JanaAGUAnalysis.com.

In its analysis, JANA argues that Agrium remains fundamentally undervalued given the strength of its two main businesses, a "Retail" distribution business and a "Wholesale" fertilizer business.  In addition, JANA notes that Agrium's shares have underperformed the weighted average of the company's true pure play peers over multi-year periods.  While Agrium's shares have performed well on an absolute basis and in the short-term this year, JANA in its analysis argues this is not a justification for depriving shareholders of the company's full value creation potential.

JANA's analysis cites structural and operational issues as the sources of the company's underperformance, and notes that such issues likely stem from a lack of true retail distribution experience on the board.  From a structural perspective, JANA argues that by pairing Retail, which is a stable agricultural distribution business, with Wholesale, which is a volatile, commodity-linked fertilizer business, Agrium has obscured Retail's true value while generating no meaningful synergies from this combination.  In addition, JANA argues, pairing Retail with Wholesale prevents each from achieving their optimal capital structure and capital allocation. 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs