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JANA Partners Welcomes Agrium To The Debate

NEW YORK, Jan. 28, 2013 /PRNewswire/ -- JANA Partners LLC Managing Partner Barry Rosenstein today responded to the analyst presentation by Agrium Inc. ("Agrium") (TSX / NYSE: AGU) in New York:  "It is good to see that after nearly 8 months Agrium has finally responded in detail, but they have failed to address numerous core issues as well as the two primary problems, which are the lack of relevant board experience and the need for an enhanced shareholder perspective.  Nowhere has Agrium made a case that shareholders would not benefit from the experience and shareholder perspective that our candidates bring, nor have they explained why shareholders should have blind faith in a board which repeatedly failed to address basic issues like capital allocation and disclosure until we pressed them to do so." 

Rosenstein stated that while JANA would carefully review Agrium's presentation and respond in more detail shortly, numerous troubling issues with today's presentation were readily apparent:
  • Dismissal of the Board's Role:  In an interview published today in advance of Agrium's presentation, CEO Michael Wilson dismissed the need for relevant industry experience on Agrium's board, saying it was not one of his "prerequisites."   In response, JANA today noted first that it was the job of shareholders to choose directors to oversee management, not the job of management based on their own selective criteria.  JANA then noted that it would be impossible for Agrium's board to properly fulfill this oversight responsibility without new directors with real distribution industry experience.
  • Thin-Skinned Response, Misleading Claims:  Repeatedly today, Mr. Wilson claimed that JANA seeks to replace Agrium management.  In fact, JANA has called for better oversight of management to boost value for all shareholders, and noted that management should welcome highly-qualified directors with relevant experience and a fresh perspective to help Agrium live up to its full value creation potential.
  • Mischaracterization of JANA's Analysis:  While Agrium claims that JANA's focus on poor corporate governance is a shift from its initial analysis, JANA noted that the events it has cited as evidence of governance issues (including the comparables "switcheroo" and botched shared repurchase) in fact occurred after JANA's initial analysis.
  • Distorted Analysis:  While JANA intends to respond in full to today's presentation, it has already identified numerous issues with Agrium's analysis, including margin analysis based on flawed metrics, cherry-picked examples, clearly contradictory statements, and other problems JANA will respond to in due course. 

Despite these issues, Rosenstein noted that Agrium's presentation was the beginning of a healthy, long-overdue debate and would put a much-needed focus on the unrealized value potential of Agrium's Retail business.  "We welcome Agrium's better-late-than-never entry into the debate, and look forward to responding in full to today's presentation," Rosenstein noted.  "We will continue to shine a spotlight on the 5 C's of maximizing value at Agrium, and we remain confident that shareholders will welcome the candidates we have put forth to pursue them." 

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