Viterra’s Largest Investor Rejects ‘Vague’ Plans for Board

Viterra Inc.’s largest shareholder rejected the Canadian grain handler’s “vague” plans for the election of its directors and said management isn’t prepared to make meaningful changes to the board.

“The process announced by Viterra will result in further entrenchment of an unresponsive and unaligned board that may limit the company’s long-term potential,” Alberta Investment Management Corp. said today in a statement. The Edmonton, Alberta-based fund, known as AIMCo, “does not believe that the current Viterra board has the required skills or expertise to meet the company’s leadership needs as a growing international agribusiness.”

Viterra, the largest grain handler in Canada, said in an Oct. 28 statement that it’s compiling a list of proposed nominees for the 13-member board. Two directors, Vic Bruce and Paul Daniel, won’t be standing for re-election at the Regina, Saskatchewan-based company’s March 8 shareholders meeting, it said in the statement.

Viterra has expanded by making six acquisitions since its reorganization in 2005, including the A$1.92 billion ($1.98 billion) purchase of Australia’s ABB Grain Ltd. in September 2009, according to Bloomberg data. Viterra is looking for acquisitions in North America and will benefit from the Canadian government’s plan to dismantle the Canadian Wheat Board’s monopoly on the marketing of wheat and barley from the west of the country, Chief Executive Officer Mayo Schmidt said Oct. 24.

‘Committed Shareholder’

“AIMCo’s announcement is under consideration by Viterra’s nominating and corporate governance committee,” the company said today in an e-mailed statement.

The fund “is a long-term, committed shareholder, a big believer in the Viterra story,” Steven Hansen, an analyst at Raymond James in Vancouver who has an “outperform” rating on Viterra, said today in a telephone interview. “They’re also big believers in corporate governance playing an important role in providing, or contributing to, long-term shareholder value.”

AIMCo said it’s the largest Viterra investor and has been the biggest single shareholder since 2009. The fund has C$71 billion ($70 billion) under management, according to its website.

Viterra rose 0.5 percent to C$10.31 at 4 p.m. in Toronto.

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