Canada's Agrium issues proxy circular, slams hedge fund's break-up plans

Mon Mar 4, 2013 7:34am EST
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* Agrium says Jana's plan to split company is "ill-conceived"

* Agrium says integrated strategy has paid off for investors

By Euan Rocha

TORONTO, March 4 (Reuters) - The war of words between fertilizer maker Agrium Inc and its biggest shareholder, Jana Partners, escalated on Monday with Agrium slamming the hedge fund's plan to split the company in a letter to investors ahead of its annual meeting next month.

Calgary, Alberta-based Agrium, which has begun mailing its proxy circular to shareholders ahead of the meeting on April 9, said Jana's plan is an "ill-conceived scheme" that will destroy shareholder value.

The activist U.S. hedge fund, which owns some 7.5 percent of Agrium's shares, has for months demanded a number of changes at the company, including a split between its wholesale fertilizer production arm and its retail business, which sells seeds, crop protection chemicals, fertilizers and other farm products.

Talks aimed at developing a truce between the two sides broke down in February and Jana has proposed five candidates for election to Agrium's 13-member board.

The proxy fight is the latest in a series of high-profile battles led by activist investors seeking to shake up the boards of leading Canadian companies. Last year, U.S. investor William Ackman, using a similar playbook to the one now being employed by Jana, succeeded in installing his hand-picked candidate as chief executive of Canadian Pacific Railway Ltd.

Jana, a New York-based hedge fund, has in the past won high-profile campaigns at companies such as Marathon Petroleum Corp and McGraw-Hill Cos Inc.   Continued...