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

Addendum:  Corrected Chronology of Talks Between JANA and Agrium

It is not surprising that Agrium wants to shift the focus from shareholder rejection of its directors and the status quo back to its distortion-filled account.  In fact, Agrium has been trying to sell its untruthful version of events to the media since our talks ended, and having failed to find any takers, has now resorted to self-publishing its own faulty work two weeks later.  While we will continue to focus on the issues, for any shareholders who are interested, or for scholars of board entrenchment tactics, we offer the following corrected timeline.

  • Friday, February 8 th - Agrium's lawyers approached JANA offering a settlement whereby Agrium would appoint one director selected by JANA and two new directors chosen by Agrium who it claimed would address the board's lack of industry experience, but declined to identify these directors (Agrium would in fact refuse to disclose such identities for over 48 hours, until near the end of the talks).
  • JANA responded in writing that it was willing to explore a settlement on these terms provided that Agrium's new directors prove to be acceptable to JANA and that Agrium commit to fully exploring in some manner the issues raised by JANA in this campaign in the areas of Costs, Capital Allocation, Controls, Conglomerate Structure (which JANA requested a new independent review of given the highly flawed structural review process conducted by Agrium) and Corporate Governance. 
  • Saturday, February 9 th - Rather than agreeing to fully explore such issues, Agrium repeatedly demanded that JANA embrace propaganda written by Agrium praising its performance on the very issues that JANA has identified as areas for substantial improvement, and repeatedly threatened to end discussions unless JANA agreed to do so, which JANA never did.
  • Sunday, February 10 thAgrium's CEO and JANA's Managing Partner agreed that the settlement structure offered by Agrium would be acceptable, if Agrium's new directors (whose identities had still not been disclosed at that point) proved acceptable and if Agrium agreed in some form to exploring the issues raised by JANA (neither of which occurred).
  • JANA entered into drafting discussions with Agrium's counsel that evening on a settlement agreement and press release, in case Agrium's new directors proved acceptable (which they ultimately did not) and in case Agrium agreed to exploring the issues raised by JANA in some form (which it ultimately did not).  The press release disclosed today by Agrium was drafted by Agrium itself and was never approved by JANA, and includes self-praise Agrium tried to put in our mouths.  These legal documents were worked on by JANA to try to accommodate a self-imposed deadline set by Agrium for reaching agreement, and Agrium's attempt to use a press release it drafted itself and we never agreed to in order to evidence its false claims speaks volumes about the current board's integrity and the need for change.
  • Monday, February 11 thAfter reviewing the qualifications of Mayo Schmidt and David Everitt, who Agrium refused to identify until after 7pm on Sunday night which was more than 48 hours after discussions began, and in light of Agrium's continued refusal to commit in any manner to exploring the areas for improvement identified by JANA, JANA informed Agrium that its settlement offer was insufficient and more would be required to reach agreement, at which points these settlement discussions ended.

It appears that Agrium was never serious about appointing highly-qualified independent directors who could critically review the status quo, or to committing to fully explore the myriad opportunities for substantial additional value creation at Agrium, and was simply looking for a way to avoid a proxy fight that we believe it will ultimately lose.  That is Agrium's prerogative.  It is time however to drop the diversionary tactics and move on to the substantive issues. 

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