Further Information Available at www.JANAAguAnalysis.com
NEW YORK, Feb. 25, 2013 /CNW/ - 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."
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(th) – Agrium'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
-- Monday, February 11(th) – After 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.
Information in Support of Public Broadcast Solicitation
JANA is relying on the exemption under section 9.2(4) of National Instrument
51-102 – Continuous Disclosure Obligations to make this public broadcast
solicitation. The following information is provided in accordance with
corporate and securities laws applicable to public broadcast solicitations.
This solicitation is being made by JANA, and not by or on behalf of the
management of Agrium.
The address of Agrium is 13131 Lake Fraser Drive S.E., Calgary, Alberta T2J
JANA has filed an information circular containing the information required by
Form 51-102F5 – Information Circular in respect of its proposed nominees,
which is available on Agrium's company profile on SEDAR at www.sedar.com and
Proxies for the Agrium shareholders' meeting may be solicited by mail,
telephone, email or other electronic means as well as by newspaper or other
media advertising, and in person by managers, directors, officers and
employees of JANA, who will not be specifically remunerated therefor. In
addition, JANA may solicit proxies in reliance upon the public broadcast
exemption to the solicitation requirements under applicable Canadian corporate
and securities laws, conveyed by way of public broadcast, including through
press releases, speeches or publications, and by any other manner permitted
under applicable Canadian laws. JANA may engage the services of one or more
agents and authorize other persons to assist it in soliciting proxies on
behalf of JANA. All costs incurred for the solicitation will be borne by JANA.
JANA has entered into agreements with Kingsdale Shareholder Services Inc.
("Kingsdale") and The Laurel Hill Advisory Group Company ("Laurel Hill")
pursuant to which Kingsdale and Laurel Hill have agreed to assist JANA in
soliciting shareholders should JANA commence a formal solicitation of proxies.
Kingsdale's responsibilities will principally include advising JANA on
governance best practices, where applicable, liaising with proxy advisory
firms, developing and implementing shareholder communication and engagement
strategies, and advising with respect to meeting and proxy protocol. Laurel
Hill will be principally responsible for the solicitation of retail
shareholders and other strategic advice. Pursuant to the agreement with
Kingsdale, for its solicitation services, Kingsdale would receive a fee in the
range of $125,000 to $250,000, plus disbursements and a telephone call fee.
In addition, Kingsdale may be entitled to a success fee on the successful
completion of JANA's solicitation, as determined by JANA in consultation with
Kingsdale. Kingsdale will also receive a separate fee for its other services.
Pursuant to the agreement with Laurel Hill, Laurel Hill would receive a fee of
up to $100,000, plus disbursements and a telephone call fee. In addition,
Laurel Hill will be entitled to a success fee of $100,000 on the successful
completion of JANA's solicitation. All costs incurred for the solicitation
will be borne by JANA.
JANA is not requesting that Agrium shareholders submit a proxy at this time.
Once JANA has commenced a formal solicitation of proxies, a registered holder
of common shares of Agrium that gives a proxy may revoke it: (a) by completing
and signing a valid proxy bearing a later date and returning it in accordance
with the instructions contained in the form of proxy to be provided by JANA,
or as otherwise provided in the final proxy circular, once made available to
shareholders; (b) by depositing an instrument in writing executed by the
shareholder or by the shareholder's attorney authorized in writing, as the
case may be: (i) at the registered office of Agrium at any time up to and
including the last business day preceding the day the meeting of Agrium
shareholders or any adjournment or postponement of the meeting is to be held,
or (ii) with the chairman of the meeting prior to its commencement on the day
of the meeting or any adjournment or postponement of the meeting; or (c) in
any other manner permitted by law. A non-registered holder of common shares
of Agrium will be entitled to revoke a form of proxy or voting instruction
form given to an intermediary at any time by written notice to the
intermediary in accordance with the instructions given to the non-registered
holder by its intermediary.
To the knowledge of JANA, neither JANA nor any of its managers, directors or
officers, or any associates or affiliates of the foregoing, nor any of JANA's
nominees, or their respective associates or affiliates, has: (i) any material
interest, direct or indirect, in any transaction since the beginning of
Agrium's most recently completed financial year or in any proposed transaction
that has materially affected or would materially affect Agrium or any of its
subsidiaries; or (ii) any material interest, direct or indirect, by way of
beneficial ownership of securities or otherwise, in any matter currently known
to be acted upon at the meeting of Agrium shareholders other than the election
JANA Partners LLC, +1-212-455-0900
SOURCE: JANA Partners LLC
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CO: JANA Partners LLC
ST: New York
-0- Feb/25/2013 18:54 GMT
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