From an operational perspective, JANA argues that a failure to manage costs has caused Retail to substantially underearn and that Agrium has suffered from poor capital allocation, including a failure to manage working capital, inadequate returns on some of its largest acquisitions and – prior to a recent return of capital announcement which followed JANA's engagement – a poor historical track record of returning capital to shareholders. In addition, JANA notes that Agrium has compounded these issues with insufficient public reporting disclosure in Retail.
To remedy these issues and unlock Agrium's buried value potential, JANA has proposed the following steps: committing to a larger and more consistent return of capital going forward, improving Retail disclosure, initiating a working capital and operational cost reduction plan in Retail, rationalizing unallocated corporate overhead and pursuing a separation of Retail and Wholesale.
In his remarks today, Rosenstein urged Agrium's board and management to set aside "diversionary tactics" and embrace Agrium's value creation potential, saying "we see no reason why shareholders should be forced to settle for 'good enough' when the company can so readily address its persistent underperformance and undervaluation by addressing the issues we've raised."
For more info contact JANA Partners LLC at (212) 455 0900 SOURCE JANA Partners LLC