Mr. Barry Rosenstein reports
JANA PARTNERS RELEASES NEW LETTER TO AGRIUM SHAREHOLDERS
Jana Partners has mailed a new letter
to Agrium Inc. shareholders.
The text of the letter follows.
Jana partners urges fellow shareholders to vote the blue proxy card or voting instruction form for its experienced and independent board nominees.
Dear fellow Agrium shareholders:
Agrium is hoping that scare tactics and illogical arguments will get you
to vote against the highly qualified and independent nominees Jana
Partners has proposed for a minority of its board of directors. We are
hoping the facts and the potential to unlock substantial unrealized
value for all Agrium shareholders -- that means you and us -- will carry the day. So here are the facts.
Agrium has consistently underperformed its potential in shareholder
returns, including trailing a weighted index of its peers by 62 per cent and
22 per cent in the last five and three years, respectively. While Agrium cites a 467-per-cent
return over more than seven years, this index has returned 817 per cent over the
same period. Agrium can do better for shareholders, and it does not
require radical change to do so, just an open mind. That is why we
have invested over $1-billion in Agrium and why we are asking for your
We approached Agrium last May, expressing our concerns and suggesting
steps that could be taken to address those concerns. Agrium took some
positive steps in response, notably increasing its dividend and
commencing its first large-share repurchase, but has resisted further
changes that could create even greater long-term value.
Agrium has tried to paint us as a New York hedge fund out to destroy
value at your company. Stereotypes are easy, but the truth is always
better. Our business is to create value for our investors, including
pension funds, institutions, and individuals in the United States and Canada.
That's what we've done for years, usually by working constructively
with boards and management.
"We see upside comfortably beyond $150 if the Jana slate wins, and
initial downside to about $90 if the Agrium board is re-elected."
The company would like you to believe that our interests differ from
yours, so that we could somehow destroy value without destroying the
value of our own investment. That makes no sense. We own Agrium
common stock just like you and stand to gain or lose just like you. We
have proposed improvements for the long term, not the short term. We call them the five Cs:
Cost management: reviewing retail costs and corporate costs;
- Controls: improving disclosure and better aligning incentives with value
- Capital allocation: a more consistent and shareholder-friendly capital return policy;
- Conglomerate structure: a fair and unbiased structural review to address Agrium's persistent
- Corporate governance: addressing Agrium's insular and entrenched responses to new ideas.
To help the board address these issues, Jana has proposed five new,
independent directors, who would bring much needed experience and a very
clear shareholder mindset to the board. David Bullock, Mitchell
Jacobson and Stephen Clark have created literally billions of dollars
of value at distribution companies which Agrium has cited as peers for
its retail business. Lyle Vanclief served Canada as the Minister of
Agriculture and ran a commercial farm before that, and I am the
founder of Jana Partners and have been working to unlock
value at companies for over two decades.
The company has accused us of only wanting to break up Agrium to
destroy value, but again they are hoping you will believe we invest
money to lose it. It is true that we have called for a review of
whether retail, which has been built primarily through acquisitions and
has only been a large part of Agrium for seven of its 82 years, would be
better off as an independent publicly traded Canadian company. Despite
Agrium's supposed shock at this idea, many investors have been asking
this for years, and Agrium's chief executive officer has called this a good question to
ask (The Globe and Mail, Jan. 31, 2013). If a fair and independent review, which Agrium has failed
to conduct, showed that Agrium's current structure was the best one, we
would accept that result.
Contrary to what you have heard from the company about Jana Partners'
nominees, each of us will be independent, each of us will benefit only
if all shareholders benefit and each of us will only have a duty to
Now we need your support to help Agrium realize its full value
potential for all shareholders.
Vote the blue proxy or VIF for unlocking Agrium's substantial value creation
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