Shareholder Jana demands Agrium respond to issues

Tue Oct 16, 2012 5:28pm EDT
 
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(Reuters) - Hedge fund Jana Partners LLC, the largest shareholder in Agrium Inc AGU.TO (AGU.N: Quote), which has been pushing for a split of the Canadian fertilizer company's wholesale and retail division, on Tuesday called for the company to be more open to discussing ways to boost shareholder value.

Jana said Agrium's responses to the issues it has raised have been "incomplete" and "misleading."

"Agrium has tried everything but making a compelling argument for the status quo," said Jana managing partner Barry Rosenstein in a statement. "While the company may dispute narrow elements of our analysis, nothing they have said refutes the overall picture of undervaluation and underperformance relative to Agrium's true potential."

Agrium officials did not immediately comment.

Jana, which owns about 4 percent of the Calgary, Alberta-based company, also wants Agrium to improve disclosure, reduce operating costs and working capital and address some corporate costs. It said on October 1 that shareholders could see Agrium's share price rise by about $50, or nearly 50 percent, if the company took steps to improve its business.

Agrium has countered that it is confident an "overwhelming" majority of shareholders see greater value with the company's integrated strategy, and that it has met extensively with Jana about its ideas.

But Jana said Agrium has not given a substantive response, for example to its key concern that the retail and wholesale businesses are a poor combination.

Agrium's shares ended slightly lower in New York on Tuesday at $103.77. They rose modestly in Toronto to C$102.44.

The company is a major producer of nitrogen fertilizer and a producer of potash and phosphate, nutrients used to boost crop yields. Agrium also owns the biggest network of farm retail stores in the United States, where it sells seed, chemicals and fertilizer.

(Reporting by Rod Nickel in Winnipeg, Manitoba; editing by Carol Bishiopric and Leslie Adler)