Agrium Inc. (AGU) Chief Executive Officer Mike Wilson said there is no reason for his company to compromise with activist shareholder Jana Partners LLC’s demands for change at the largest retailer of fertilizer and seeds to U.S. farmers.
Jana is seeking to replace five of Agrium’s directors with its own board nominees and has proposed that the Calgary-based company spin off its retail business to boost profitability. The New York-based hedge fund is Agrium’s largest shareholder, according to data compiled by Bloomberg.
“The bottom line is their arguments are flawed -- our retail is a fantastic operating business, our growth is great and our integrated strategy is paying off,” Wilson said today from New York in a phone interview with reporters. “So why would you compromise when their position is so flawed?”
Jana’s plans are unnecessary, Wilson said. The hedge fund’s proposals would cause “huge value destruction,” Wilson said in a presentation in New York to analysts.
In a statement today, Jana Managing Partner Barry Rosenstein said Agrium failed to address Jana’s concerns about “a lack of relevant board experience and the need for an enhanced shareholder perspective.”
Jana’s nominees to Agrium’s board include Rosenstein, David Bullock, a former chief financial officer of Graham Packaging Inc., and Stephen Clark, the former chief executive officer of German chemicals distributor Brenntag AG (BNR), according to the statement. The other two nominees are Mitchell Jacobson, chairman of MSC Industrial Direct Co., and Lyle Vanclief, a former Canadian minister of agriculture.
Agrium fell 1.1 percent to C$114.15 at the close in Toronto. The shares have risen 42 percent in the last year.
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