Reuters / Hedge fund Jana Partners LLC, the largest shareholder in Agrium Inc., is calling for the company to be more open to discussing ways to boost shareholder value.
Jana, which has been pushing for a split of the Canadian fertilizer company’s wholesale and retail division, says Agrium’s responses to the issues it has raised have been “incomplete” and “misleading.”
“Agrium has tried everything but making a compelling argument for the status quo,” said Jana managing partner Barry Rosenstein. “While the company may dispute narrow elements of our analysis, nothing they have said refutes the overall picture of undervaluation and underperformance.”
Jana, which owns about four per cent of the Calgary company, also wants Agrium to improve disclosure, reduce operating costs and working capital, and address some corporate costs. It says Agrium’s share price could rise by about $50, or nearly 50 per cent, if the company took steps to improve its business.
Jana said Agrium has not given a substantive response, for example, to its key concern that the retail and wholesale businesses are a poor combination.
Company spokesman Richard Downey countered that Agrium is confident a majority of shareholders sees greater value with the company’s integrated strategy, and that it has met extensively with Jana about its ideas.
“There are major flaws in Jana’s analysis and conclusions and, as a result, its ideas lack both merit and investor support,” said Downey. “There is overwhelming support by shareholders and analysts for a continuation of Agrium’s highly successful strategy and structure.”