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* Agrium says practice is common
* Jana wants retail spinoff, better use of capital
April 1 (Reuters) - Hedge fund Jana Partners accused Canadian fertilizer company Agrium Inc on Monday of improperly paying brokers and investment advisers for shareholder votes as Jana's battle to shake up Agrium's board enters its final week.
An Agrium spokesman said Jana's comments are baseless, and that the company is soliciting dealers as a means of getting information to Canadian shareholders that are hard to reach.
Jana, the largest shareholder in Agrium, has said the company should look at spinning off its retail division, return more capital to shareholders, cut costs and add relevant retail experience to its board.
Citing a private memo from Agrium, Jana said Agrium is offering to pay 25 Canadian cents per share voted in favor of the company's nominees for its board of directors. Payment is contingent on Agrium's full slate of 12 candidates winning election to the board, Jana said.
Such an arrangement is "improper," but not necessarily illegal, said a source close to Jana, a New York-based fund that holds a 7.5 percent stake in Agrium.
Jana, which has five candidates running for Agrium's board, has no plans to pay dealers in a similar manner, the source said. The board election is scheduled to wrap up on April 9 at Agrium's annual meeting in Calgary, Alberta.
A spokesman for Agrium said Jana had signaled it had similar plans for gaining shareholder support, and the company had not wanted to be at a disadvantage.
Paying dealers for rounding up votes is common practice in Canada, and was recently used in a proxy fight involving telecom company Telus Corp, the Agrium spokesman said.
Agrium has questioned the independence of Jana's slate, noting that the "dissident nominees have agreed to accept special incentive payments from Jana for serving on Agrium's board".
Agrium shares were down more than 1 percent in New York and Toronto around midday. In Toronto, they were down C$1.00 at C$98.06.