Asks Investment Advisers and Brokers to Put Clients' Interests First
Further Information Available at www.JANAAguAnalysis.com
NEW YORK, April 2, 2013 /CNW/ - Following yesterday's notice from JANA
Partners that Agrium Inc. ("Agrium") (TSX / NYSE: AGU) is using shareholder
money to pay brokers and investment advisers for votes for Agrium's directors,
the response has been swift and decisive.
-- "Agrium's broker fee fails to pass the smell test." – The
Globe & Mail, April 2, 2013
-- "25 cents? That's the going rate it seems to bribe shareholders
… There just seems to be something sleazy about all of
this." – BNN Business News Network, April 1, 2013
-- "I don't know if there's a clearer definition of buying a vote
out there than what they are doing. Paying 25 cents for a yes
vote." - BNN Business News Network, April 1, 2013
While 24 hours later Agrium has given no justification or released any of the
details of its vote buying plan, which is unprecedented, it has made a number
of false statements in its defense.
-- "This is common in Canada." – False. This tactic is
sometimes used in M&A or other transactions that have been
approved by an unconflicted board, not where a board is trying
to influence the outcome of its own election. We are aware of
this happening in a contested board election exactly one other
time, and in that case the full details of such arrangement
were publicly disclosed. Something that has happened once is
not common, and no matter how many times something improper
happens, it is still improper.
-- "This is no different than paying a proxy solicitor" –
False. Proxy solicitors identify themselves as working for the
company and have no relationship with the shareholder. In this
case there has been no disclosure that brokers and financial
advisors, who clients trust to give objective advice, are being
paid for Agrium votes. Apparently Agrium had no plans to
disclose these payments, thus deliberately misleading their
-- "JANA signaled it had similar plans, and we did not want to be
at a disadvantage." – False. In fact it is entirely the
other way around as Agrium first disclosed this as a
possibility in its March 4(th) proxy circular (using vague
terms suggesting that it "may" employ this tactic without
disclosing any details). Our circular, reserving the right to
do this, was filed on March 7(th). In any event, unlike Agrium,
we never pursued this option.
-- "We are just paying to reach hard to reach retail
shareholders." – False. Agrium is not paying to "reach"
shareholders. They are buying their vote for 25 cents a share,
which could add up to more than $10 million dollars, making it
one of the biggest expenses of the campaign for Agrium and a
complete misuse of shareholder money. Agrium is also only
paying for votes if its entire slate of director nominees is
-- "We are confident that we have shareholder support." – We
leave it to shareholders to determine whether this is a
credible statement in light of yesterday's revelations.
JANA today also called on all investment advisers and brokers who are
approached by Agrium with its vote buying offer to consider whether, even if
such tactics are legal in Canada (which we believe is questionable, and they
are not legal in the US), they are consistent with the trust that their
clients place in them.
JANA also directed Canadian investment advisors and brokers to review the
exemption from the Canadian proxy solicitation rules in National Instrument
51-102 which permits them to provide proxy voting advice to their clients.
That exemption clearly requires them to disclose "any significant
relationship" with Agrium and one of the conditions to the exemption clearly
prohibits them from receiving "any special commission or remuneration for
giving the proxy voting advice" other than from shareholders.
While Agrium may attempt to convince investment advisors and brokers that they
can still justify participating in an undisclosed vote buying program based on
technicalities, we ask every single one of them who is approached by Agrium to
ask themselves this question: "What would my clients, who put their trust in
me, think of that?" We believe the answer is clear, and that investment
advisors and brokers should reject Agrium's vote buying scheme.
VOTE THE BLUE PROXY OR VIF "FOR" UNLOCKING AGRIUM'S SUBSTANTIAL VALUE CREATION
Even if you have previously submitted a white proxy or given voting
instructions in support of the incumbent management nominees, you may still
change your vote and support JANA's recommendations by completing and
submitting a BLUE form of proxy or giving voting instructions in accordance
with the BLUE voting instruction form.
For questions or assistance, please contact Kingsdale Shareholder Services
Inc., at 1-866-581- 1514 toll-free in North America, or 1-416-867-2272 outside
of North America, or by email at email@example.com. To keep
current with further developments and information about voting your Shares,
JANA Partners LLC at (212) 455 0900
SOURCE: JANA Partners LLC
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CO: JANA Partners LLC
ST: New York
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-0- Apr/02/2013 13:53 GMT
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