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AGU Posts Expected Record Earnings -- JANA Persists

January 28, 2013
By: Davis Michaelsen, Pro Farmer Inputs Monitor Editor

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Agrium Inc. Chief Executive Mike Wilson spoke directly to Agrium's sell-side analysts in New York earlier today. The company reported 2012 fourth quarter earnings on Thursday of last week and the EBITDA shows record earnings are expected on the retail side, with the wholesale division not far behind.

Wilson commented, "Our Retail business unit is expected to generate over $120-million of EBITDA for the fourth quarter which equates to an expected record year of approximately $950-million of EBITDA in 2012. Our Wholesale business also continued to generate better than expected results with EBITDA for the fourth quarter and year anticipated to exceed $500-million and $1.9-billion respectively.

“The increase in our estimated financial results is due to a very strong finish to the fall application season in our North American Retail operations, supported by an extended fall season in the U.S. and continued strength in grain and oilseed prices. Going forward, continued strength in crop prices and low global grain inventories are anticipated to support a strong spring application season in 2013,” said Mike Wilson, Agrium President and CEO."

Agrium Inc. reported 2012 fourth quarter earnings of $2.00 per diluted share. Agrium’s previously announced fourth quarter earnings guidance was $1.50 to $1.90 per diluted share on a comparable basis.

The news has JANA Partners fuming. The New York hedge fund -- who owns a 5% stake in AGU with designs of restructuring the Ag giant -- immediately responded with a scathing press release which accused Agrium shareholders of "blind faith in a board which repeatedly failed."

JANA Partners has been lobbying for a restructuring of Agrium that would split the retail and wholesale divisions. JANA has also offered five new candidates for Agrium's board membership, including Barry Rosenstein, the founder and Managing Partner of JANA Partners LLC. Click here to read the Monitor's 'JANA Attempts End-Run Around AGU Board'.

"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.

Agrium has responded to JANA's overtures on numerous occasions over the past several months, making it clear that a split -- as JANA would have it -- is not in the best interest of the company or its customers.

In a comment to Reuters, AGU's Wilson said, "As far as I'm concerned, we've got a fantastic board and an excellent management team. (Jana's) best decision was buying our stock."


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