Jana Partners seek changes at Agrium to boost stock

Mon Oct 1, 2012 3:52pm EDT
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NEW YORK (Reuters) - Hedge fund Jana Partners said on Monday Canadian fertilizer company Agrium's (AGU.TO: Quote) (AGU.N: Quote) share price could rise about $50, or 50 percent, if the company took steps to improve its business.

Barry Rosenstein, who runs the $3.5 billion hedge fund that often pushes for management changes, said Agrium has lagged its peers in part because its two businesses -- seed, chemical and fertilizer production and selling directly to farmers -- do not fit well.

"We think it is abundantly clear that the company has underperformed its peers," Rosenstein said at the 8th Annual Value Investing Congress on Monday.

"We encourage Agrium to reverse course," Rosenstein added. "Why should shareholders settle for good enough?"

Laying out a plan publicly for improvement at the company for the first time, Jana Partners put some numbers on where they think the share price should be.

Agrium's stock rose more than 2 percent to $105.80 on the New York Stock Exchange, and was up $1.84 Canadian at C$103.84 on the Toronto Stock Exchange late Monday afternoon.

Jana said the company has no real retail experience and was encouraging it to spin off the retail unit, which serves farmers.

Agrium Chief Executive Mike Wilson said Jana offered nothing new in its presentation.

"Agrium remains confident that shareholders will receive far greater value, with less risk, under the company's current strategy," Wilson said in a statement.   Continued...