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JANA Declines Agrium's Invitation To Join It In The Mud

Stocks in this article: AGU













NEW YORK, Feb. 25, 2013 /PRNewswire/ -- JANA Partners LLC today responded to a new presentation released today by Agrium, Inc. ("Agrium") (TSX / NYSE: AGU) in which Agrium rehashes for a second straight week its factually inaccurate and diversionary account of the recent settlement discussions between Agrium and JANA.  These talks ended two weeks ago when JANA rejected Agrium's settlement offer because Agrium chose new directors who lack relevant industry experience and because Agrium refused to commit to fully exploring opportunities for substantial value creation in the "5 C's":  Costs, Controls, Capital Allocation, Conglomerate Structure and Corporate Governance.

"We are sure that Agrium would love nothing more than to spend the remaining weeks before the shareholder vote debating its fabricated version of our settlement discussions rather than the substantive issues," said JANA Managing Partner Barry Rosenstein.  "This would spare Agrium from addressing the market's overwhelmingly negative reaction to its new directors who were hand-picked just weeks before a shareholder vote and who lack the industry experience and independence necessary to help unlock Agrium's full value, and its refusal to engage on the issues."  Rosenstein noted, however, that the relevant facts are indisputable:

  • Agrium's entrenched response is entirely unrelated to shareholder value creation.  JANA has invested more than $1 billion in Agrium and has a proven track record of working constructively with boards and management to achieve one goal:  maximizing shareholder value.  Rather than embrace the opportunity to create substantial value and JANA's highly-qualified and independent nominees, Agrium has fought to protect the status quo, despite years of relative undervaluation and underperformance.  In fact, despite its supposed confidence in shareholder support, Agrium has resorted to a gimmicky attempt to cut off debate by moving up its annual meeting by over a month.  As one analyst noted, "Friday after the close at the start of a holiday weekend isn't typically when company boards disclose things they are proud of" ( Credit Agricole analyst quoted in today's Financial Times)
  • Agrium's new directors lack relevant experience.  Neither of Agrium's new directors has significant 'breaking bulk' distribution experience.  Three of JANA's nominees bring a combined 75-year track record of value creation in distribution and all five will bring a much-needed enhanced focus on shareholder value creation.
  • Agrium's new directors lack sufficient independence.  Prior to picking its two new directors, Agrium's CEO publicly disclosed his loyalty test for new directors, primarily that they not question management's strategy or performance, thus upending modern notions of good corporate governance.  One of these directors, former Viterra CEO Mayo Schmidt, received C$30 million when Agrium acquired Viterra's distribution business.
  • Momentum for real change continues to grow.  Agrium's new management-approved directors and entrenchment efforts were followed by a 12% decline in its stock price, well below its weighted average peer group, indicating strong dissatisfaction with the status quo.

"We are confident that Agrium shareholders can see through the diversionary tactics," Rosenstein concluded, "and that they will embrace the highly-qualified and independent nominees we have proposed who can put Agrium on the path to substantial new value creation."

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