The war of words continues between Calgary-based Agrium Inc and New York City's JANA Partners. JANA holds the largest shareholder stake in the company and has been haranguing AGU since June 2012 to split its retail and wholesale divisions. JANA claims this would unlock value for the shareholders and Agrium has consistently refused the restructuring.
Yesterday, JANA announced its own plan to seed Agrium's board of directors with its own slate of nominees, giving the hedge fund an end-around the existing board. Agrium President and CEO Mike Wilson released the following response:
"The facts are straightforward. Agrium remains committed to its highly successful integrated strategy. JANA has been trying for over six months to obtain support for its idea that Agrium should spin off or sell its retail operations. Agrium’s shareholders have overwhelmingly rejected JANA’s ideas. As a result, we believe JANA’s attempt to run its own slate for Agrium’s Board is almost certain to fail."
"The fundamental question is whether or not a break-up of Agrium would create compelling, sustainable value for its shareholders. As we have made clear, the breakup of Agrium will destroy value rather than create it."
"Before reaching the unanimous conclusion to reject a spin off of Retail, the independent directors of the Board spent two months evaluating all of JANA’s ideas with our independent financial advisor. Since that time, our management team has devoted an extraordinary amount of time meeting with our analysts and our shareholders, including JANA, to review our integrated strategy and discuss JANA’s ideas."
"We listen to our shareholders and the overwhelming majority continue to support the company’s position. Over the past year, Agrium has implemented three dividend increases, a Cdn$900-million share buyback and supplemented our retail disclosure. Other than JANA, shareholders are not asking Agrium to consider a Retail spin-off or to evaluate any other structural changes. Shareholders have told us that they invest in Agrium in part because they want exposure to retail and the advantages of our integrated model."
Time and again Agrium has sided with its track record of long standing success and profit. The only shareholder to even hint at restructuring the company is JANA -- and the activist investor is losing traction.
Your Inputs Monitor has been following this story from the beginning. To link all the stories we have written regarding the situation would be to risk wearing out your mouse. Click here to read my blog on the topic from a few weeks ago.