UPDATE 1-Agrium blasts hedge fund's break-up plans in proxy circular

Mon Mar 4, 2013 11:42am 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.

"Nothing in Agrium's new appeal to shareholders addresses the board's total failure to unlock Agrium's true value potential," Jana said in an emailed statement to Reuters.

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.   Continued...