March 27, 2013 / 4:10 AM / 6 years ago

Agrium wins crucial endorsement ahead of shareholder vote

TORONTO (Reuters) - Agrium Inc AGU.TO won another ringing endorsement just ahead of a crucial shareholder vote after influential advisory firm Glass Lewis on Tuesday advised its clients to back all 12 of Agrium’s board nominees over a slate nominated by dissident investor Jana Partners.

The recommendation from the well-regarded advisory firm is a big boost for Agrium ahead of a shareholder vote on April 9 and follows similar recommendations from smaller firms like U.S.-based Egan-Jones and UK-based Pensions Investment Research Consultants.

Proxy advisory firms like Glass Lewis advise institutional investors ahead of shareholder votes and their reports very often sway votes for or against management in proxy battles.

New York-based hedge fund Jana has been locked in a war of words with the fertilizer maker and farm products retailer for months. 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.

Glass Lewis in its report 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” in favor of maintaining its strategy than the counter arguments put forward by Jana.

“We are pleased that Glass Lewis has recommended that its subscribers support Agrium’s slate of director nominees,” said Agrium’s chairman, Victor Zaleschuk, in a statement.

Jana was not immediately reachable for comment on the Glass Lewis report.

The Glass Lewis recommendation comes close on the heels of public support for Agrium’s own nominees from some its major shareholders.

Investment management firm Letko, Brosseau & Associates, which owns about 1.5 percent of Agrium’s outstanding stock, last week said it would Agrium’s nominees. Another shareholder in Agrium, British Columbia Investment Management Corp, also sided with the company earlier this month, saying it believed that Agrium’s current board was providing effective oversight.

Agrium shareholders have already begun voting, but some big investors are still awaiting a recommendation from influential shareholder advisory services firm ISS, which has yet to weigh in on the proxy battle.

The proxy fight is the latest high-profile battle led by an activist investor seeking to shake up the board of top Canadian company. Last year, U.S. investor Bill Ackman, using a similar playbook to the one now being used by Jana, shook up the board of Canadian Pacific Railway (CP.TO) and succeeded in installing his hand-picked candidate as the railroad company’s chief executive officer.

Jana itself has in the past won high-profile campaigns at companies such as Marathon Petroleum Corp (MPC.N) and McGraw-Hill Cos Inc MHP.N.

In the fight with Agrium however, Jana faces an uphill battle convincing fellow shareholders of the merits of its case as Agrium’s stock has more than quintupled in value in the last eight years, a fact Agrium repeatedly highlighted in statements to its shareholders.

Reporting by Euan Rocha; Editing by Matt Driskill

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