Welcome!

Microsoft Cloud Authors: Pat Romanski, Lori MacVittie, Andreas Grabner, Jim Kaskade, John Basso

News Feed Item

JANA Partners Issues Open Letter To Shareholders

Further Information Available at www.JANAAguAnalysis.com

NEW YORK, Feb. 20, 2013 /PRNewswire/ -- JANA Partners LLC today released the following open letter to shareholders of Agrium, Inc. ("Agrium") (TSX / NYSE: AGU).  Agrium announced at the end of the day last Friday that its Annual General Meeting of Shareholders will be held on April 9, 2013 and that shareholders of record on February 25, 2013 will be eligible to vote.

February 20, 2013

AN OPEN LETTER TO AGRIUM SHAREHOLDERS: 
Why We Said No to the Status Quo at Agrium, and Why You Should Too

Dear Fellow Agrium Inc. Shareholder,

We have invested more than $1 billion in Agrium, making us the largest shareholder with approximately 6.5% of its outstanding shares, because we believe Agrium can generate substantial additional upside for all shareholders by addressing 5 core issues:  Costs, Controls, Capital Allocation, Conglomerate Structure and Corporate Governance.  Agrium however refuses to fully address these issues, and has subverted traditional notions of good governance by fighting off our highly qualified independent nominees and choosing their own directors merely because we have questioned its performance and strategy.  We note that the market has had a swift and negative reaction to this refusal to engage, including a 7% share price decline last week after Agrium's new directors were announced and our rejection of its insufficient settlement offer.

Upending Notions of Good Corporate GovernanceAgrium has sought to turn traditional notions of board oversight of management upside down by making any questioning of management's prior performance or strategy a disqualification for board service.  When asked recently why Agrium refused to consider our candidates, Agrium's CEO responded that "It is not typical to bring someone on the board who tells you your strategy is flawed and indirectly tells you you're incompetent." (The Globe & Mail, Feb. 4, 2013).  JANA has of course never called management "incompetent."  We have simply identified areas of substantial opportunity and proposed qualified nominees to help explore them.  This same fortress mentality was on display in our recent settlement discussions, with Agrium demanding at one point that we drop all of our issues in exchange for merely proceeding with talks, and refusing to even speak to our nominees. 

This thin-skinned and insular attitude leads us to conclude that Agrium's new directors have been pre-screened to ensure compliance with the status quo.  We further note that Agrium did not cast a very wide net to locate new board appointee Mayo Schmidt, given that Viterra's distribution business was acquired by Agrium in a transaction in which he earned over C$30MM.  We also note that our board nominees stand to benefit only to the extent that all shareholders benefit and each meets the definition of "independence" under the CBCA, NYSE rules, and Agrium's own governance guidelines.

Just last Friday, Agrium doubled-down on its approach, shifting up the usual date of its annual meeting by over a month in an apparent attempt to cut short this debate.  While we are confident that this move is too little, too late, it further paints a picture of serious governance issues at Agrium.  As one analyst put it, "Friday after the close at the start of a holiday weekend isn't typically when company Boards disclose things they are proud of, but you can't fault the Agrium Board for consistency. An abrupt shift in the dates for the shareowner meeting looks designed to perpetuate the lack of transparency and accountability that seems to be the (very) unexpected legacy of CEO Mike Wilson. Investors who have been supportive of Agrium thus far will have to think hard about whether this is the sort of behavior they want to encourage elsewhere, when they cast their ballots in this accelerated election." (Credit Agricole / CLSA, Feb. 19, 2013)

Refusal to Address Core IssuesWhen Agrium approached us seeking a settlement, we made clear that for any settlement to occur the board would need to commit to conducting a full review of the branch footprint of its distribution business ("Retail") and corporate overhead (Costs) and a full review of Retail senior management performance objectives (Controls), to communicate a targeted dividend payout ratio or some other mechanism to clarify ongoing capital return plans (Capital Allocation) and to retain a new investment bank to perform a review of Agrium's structure (Conglomerate Structure), in addition to adding highly-qualified and independent new directors rather than fighting off such change (Corporate Governance).  Agrium however refused to commit to even the mildest versions of these concepts.

Appointing New Directors Who Lack Relevant ExperienceNeither of Agrium's chosen new directors addresses the board's lack of distribution experience, which is of crucial importance given the size of Agrium's Retail business. 

  • Mayo SchmidtWhile Mr. Schmidt served as CEO of Viterra Inc. before it was acquired by Glencore and Agrium, Viterra's distribution business accounted for less than 15% of EBITDA and served primarily to advance its grain handling business. Agrium has also noted significant opportunities for improvement at Viterra's distribution business, which calls into question Mr. Schmidt's abilities in areas like cost management.  We also note that like Agrium, Viterra struggled in basic areas of oversight and performance including Costs, given Viterra's consistently high annual growth rate in corporate overhead, and Capital Allocation, given that Viterra executed no share repurchases (instead issuing over $2 billion of equity) and initiated a small dividend only after coming under pressure from shareholders to do so.
  • David EverittMr. Everitt ran a unit at Deere & Co. that manufactured and sold capital equipment to a separate independently-owned and operated dealer network. While he has experience in agriculture and with manufacturing and supply chain issues, he brings no experience in managing true "breaking bulk" distribution of primarily third party manufactured products, which is a crucial gap given that Agrium's Retail business purchases the vast majority of its products from third party suppliers and breaks bulk to distribute to farmer customers.

By contrast, 3 of our 5 nominees bring more than 75 years of combined experience creating substantial value in true "breaking bulk" distribution and excellent track records of deploying capital with a true owner orientation.

Questions for Every Shareholder.   

  • Wouldn't a board more concerned with good governance and continuous improvement than avoiding criticism have agreed to merely fully explore the issues we set forth above, given the billions in potential value creation?
  • Why would the board resist adding a minority of new directors who actually have the experience to ask the right questions about Retail's operations and strategy?
  • Why would a board that has spent $4 billion on Retail acquisitions that have failed to meet Agrium's minimum return hurdle and which failed for years to engage in significant shareholder return of capital until pressured to do so refuse to simply clarify its ongoing capital return plans?
  • Why would a board that has overseen a 14% annual growth rate in corporate overhead, has a Retail footprint which by Agrium's own admission and measurement standards has a glaring degree of duplication, and has generated negative operating leverage refuse to consider seriously examining its costs?
  • If Agrium's conglomerate structure truly creates more value than a separation, why is the board so resistant to an independent and fair review, particularly given the flaws in its initial review including manipulating trading comparables and hiring advisors who once argued against Agrium's structure to now defend it, and given that our nominees will constitute only a minority of the board once elected?
  • Why would a board that has consistently set compensation targets for Retail management that prioritize growth through acquisitions over profitability refuse to an enhanced review of these compensation targets and objectives?
  • Why would a board that has overseen a litany of corporate governance failings including talking down its own value to avoid a debate, botching a significant share repurchase, accelerating its annual meeting date and more resist adding independent and shareholder-oriented new directors?

We believe the board should be saying yes to these opportunities to unlock Agrium's full value creation potential, rather than wasting substantial shareholder money fighting them off, and we remain confident that once our highly qualified and shareholder-focused director candidates are elected, the board will do so.

Sincerely,

JANA Partners LLC

Information in Support of Public Broadcast Solicitation

JANA is relying on the exemption under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations to make this public broadcast solicitation.  The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.

This solicitation is being made by JANA, and not by or on behalf of the management of Agrium.

The address of Agrium is 13131 Lake Fraser Drive S.E., Calgary, Alberta T2J 7E8.

JANA has filed an information circular containing the information required by Form 51-102F5 – Information Circular in respect of its proposed nominees, which is available on Agrium's company profile on SEDAR at www.sedar.com and at www.JANAAguAnalysis.com.

Proxies for the Agrium shareholders' meeting may be solicited by mail, telephone, email or other electronic means as well as by newspaper or other media advertising, and in person by managers, directors, officers and employees of JANA, who will not be specifically remunerated therefor.  In addition, JANA may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws.  JANA may engage the services of one or more agents and authorize other persons to assist it in soliciting proxies on behalf of JANA.  All costs incurred for the solicitation will be borne by JANA.

JANA has entered into agreements with Kingsdale Shareholder Services Inc. ("Kingsdale") and The Laurel Hill Advisory Group Company ("Laurel Hill") pursuant to which Kingsdale and Laurel Hill have agreed to assist JANA in soliciting shareholders should JANA commence a formal solicitation of proxies.  Kingsdale's responsibilities will principally include advising JANA on governance best practices, where applicable, liaising with proxy advisory firms, developing and implementing shareholder communication and engagement strategies, and advising with respect to meeting and proxy protocol. Laurel Hill will be principally responsible for the solicitation of retail shareholders and other strategic advice. Pursuant to the agreement with Kingsdale, for its solicitation services, Kingsdale would receive a fee in the range of $125,000 to $250,000, plus disbursements and a telephone call fee.  In addition, Kingsdale may be entitled to a success fee on the successful completion of JANA's solicitation, as determined by JANA in consultation with Kingsdale. Kingsdale will also receive a separate fee for its other services. Pursuant to the agreement with Laurel Hill, Laurel Hill would receive a fee of up to $100,000, plus disbursements and a telephone call fee. In addition, Laurel Hill will be entitled to a success fee of $100,000 on the successful completion of JANA's solicitation. All costs incurred for the solicitation will be borne by JANA.

JANA is not requesting that Agrium shareholders submit a proxy at this time.  Once JANA has commenced a formal solicitation of proxies, a registered holder of common shares of Agrium that gives a proxy may revoke it: (a) by completing and signing a valid proxy bearing a later date and returning it in accordance with the instructions contained in the form of proxy to be provided by JANA, or as otherwise provided in the final proxy circular, once made available to shareholders; (b) by depositing an instrument in writing executed by the shareholder or by the shareholder's attorney authorized in writing, as the case may be: (i) at the registered office of Agrium at any time up to and including the last business day preceding the day the meeting of Agrium shareholders or any adjournment or postponement of the meeting is to be held, or (ii) with the chairman of the meeting prior to its commencement on the day of the meeting or any adjournment or postponement of the meeting; or (c) in any other manner permitted by law.  A non-registered holder of common shares of Agrium will be entitled to revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered holder by its intermediary.

To the knowledge of JANA, neither JANA nor any of its managers, directors or officers, or any associates or affiliates of the foregoing, nor any of JANA's nominees, or their respective associates or affiliates, has: (i) any material interest, direct or indirect, in any transaction since the beginning of Agrium's most recently completed financial year or in any proposed transaction that has materially affected or would materially affect Agrium or any of its subsidiaries; or (ii) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter currently known to be acted upon at the meeting of Agrium shareholders other than the election of directors.

SOURCE Jana Partners LLC

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
"We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at 20th Cloud Expo, Ed Featherston, director/senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
"Once customers get a year into their IoT deployments, they start to realize that they may have been shortsighted in the ways they built out their deployment and the key thing I see a lot of people looking at is - how can I take equipment data, pull it back in an IoT solution and show it in a dashboard," stated Dave McCarthy, Director of Products at Bsquare Corporation, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effici...
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, provided an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data professionals...
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and G...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...