Agrium battle heats up, advisory firms differ

Wed Mar 27, 2013 10:20am EDT
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By Euan Rocha

TORONTO (Reuters) - The battle for Agrium Inc's (AGU.TO: Quote) future is heating up ahead of an April 9 vote after the two most influential proxy advisory firms disagreed on the candidates shareholders should back in the election of Agrium's board of directors.

Institutional Shareholder Services recommends clients back two of the five nominees proposed by dissident investor Jana Partners, putting it at odds with a Glass Lewis endorsement of all 12 of Agrium's board nominees.

Jana, Agrium's largest shareholder with a 7.5 percent stake, wants Agrium to spin off its farm retail arm, improve its use of capital and cut costs, among other things. Agrium favors the status quo and highlights a steep rise in its share price as evidence that it is on the right track.

The Glass Lewis recommendation follows similar views from smaller firms like U.S.-based Egan-Jones and UK-based Pensions Investment Research Consultants.

The conflicting views could cloud the outcome of a crucial shareholder vote on April 9. Proxy advisory firms like ISS and Glass Lewis advise institutional investors ahead of shareholder votes and their reports very often sway votes for or against management in proxy battles.

ISS, noting that Jana makes a compelling case for change at Agrium, a fertilizer maker and farm products retailer, endorses Jana nominees Barry Rosenstein and David Bullock.

New York-based hedge fund Jana has been locked in a war of words with Agrium for months.

Glass Lewis advised its institutional investor clients to back Agrium's nominees over Jana's five-member slate as it believes that Agrium had presented a "more compelling case" than the arguments put forward by Jana.   Continued...