|By PR Newswire||
|February 20, 2013 12:00 PM EST||
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 Governance. Agrium 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 Issues. When 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 Experience. Neither 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 Schmidt. While 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 Everitt. Mr. 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.
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
"We've discovered that after shows 80% if leads that people get, 80% of the conversations end up on the show floor, meaning people forget about it, people forget who they talk to, people forget that there are actual business opportunities to be had here so we try to help out and keep the conversations going," explained Jeff Mesnik, Founder and President of ContentMX, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 23, 2016 11:45 PM EDT Reads: 1,193
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Jul. 23, 2016 11:15 PM EDT Reads: 1,848
When people aren’t talking about VMs and containers, they’re talking about serverless architecture. Serverless is about no maintenance. It means you are not worried about low-level infrastructural and operational details. An event-driven serverless platform is a great use case for IoT. In his session at @ThingsExpo, Animesh Singh, an STSM and Lead for IBM Cloud Platform and Infrastructure, will detail how to build a distributed serverless, polyglot, microservices framework using open source tec...
Jul. 23, 2016 11:00 PM EDT Reads: 2,216
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Jul. 23, 2016 10:15 PM EDT Reads: 2,408
From wearable activity trackers to fantasy e-sports, data and technology are transforming the way athletes train for the game and fans engage with their teams. In his session at @ThingsExpo, will present key data findings from leading sports organizations San Francisco 49ers, Orlando Magic NBA team. By utilizing data analytics these sports orgs have recognized new revenue streams, doubled its fan base and streamlined costs at its stadiums. John Paul is the CEO and Founder of VenueNext. Prior ...
Jul. 23, 2016 09:30 PM EDT Reads: 1,940
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
Jul. 23, 2016 08:45 PM EDT Reads: 1,646
CenturyLink has announced that application server solutions from GENBAND are now available as part of CenturyLink’s Networx contracts. The General Services Administration (GSA)’s Networx program includes the largest telecommunications contract vehicles ever awarded by the federal government. CenturyLink recently secured an extension through spring 2020 of its offerings available to federal government agencies via GSA’s Networx Universal and Enterprise contracts. GENBAND’s EXPERiUS™ Application...
Jul. 23, 2016 08:30 PM EDT Reads: 1,767
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 23, 2016 08:30 PM EDT Reads: 2,017
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Jul. 23, 2016 08:00 PM EDT Reads: 2,411
Big Data engines are powering a lot of service businesses right now. Data is collected from users from wearable technologies, web behaviors, purchase behavior as well as several arbitrary data points we’d never think of. The demand for faster and bigger engines to crunch and serve up the data to services is growing exponentially. You see a LOT of correlation between “Cloud” and “Big Data” but on Big Data and “Hybrid,” where hybrid hosting is the sanest approach to the Big Data Infrastructure pro...
Jul. 23, 2016 08:00 PM EDT Reads: 1,787
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discussed how businesses can gain an edge over competitors by empowering consumers to take control through IoT. He cited examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He also highlighted how IoT can revitalize and restore outdated business models, making them profitable ...
Jul. 23, 2016 07:15 PM EDT Reads: 1,867
We all know the latest numbers: Gartner, Inc. forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30 percent from last year, and will reach 20.8 billion by 2020. We're rapidly approaching a data production of 40 zettabytes a day – more than we can every physically store, and exabytes and yottabytes are just around the corner. For many that’s a good sign, as data has been proven to equal money – IF it’s ingested, integrated, and analyzed fast enough. Without real-ti...
Jul. 23, 2016 07:00 PM EDT Reads: 869
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Jul. 23, 2016 06:15 PM EDT Reads: 799
With 15% of enterprises adopting a hybrid IT strategy, you need to set a plan to integrate hybrid cloud throughout your infrastructure. In his session at 18th Cloud Expo, Steven Dreher, Director of Solutions Architecture at Green House Data, discussed how to plan for shifting resource requirements, overcome challenges, and implement hybrid IT alongside your existing data center assets. Highlights included anticipating workload, cost and resource calculations, integrating services on both sides...
Jul. 23, 2016 06:00 PM EDT Reads: 1,885
"We are a well-established player in the application life cycle management market and we also have a very strong version control product," stated Flint Brenton, CEO of CollabNet,, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 23, 2016 05:30 PM EDT Reads: 1,721
The IoT has the potential to create a renaissance of manufacturing in the US and elsewhere. In his session at 18th Cloud Expo, Florent Solt, CTO and chief architect of Netvibes, discussed how the expected exponential increase in the amount of data that will be processed, transported, stored, and accessed means there will be a huge demand for smart technologies to deliver it. Florent Solt is the CTO and chief architect of Netvibes. Prior to joining Netvibes in 2007, he co-founded Rift Technologi...
Jul. 23, 2016 05:00 PM EDT Reads: 939
Unless your company can spend a lot of money on new technology, re-engineering your environment and hiring a comprehensive cybersecurity team, you will most likely move to the cloud or seek external service partnerships. In his session at 18th Cloud Expo, Darren Guccione, CEO of Keeper Security, revealed what you need to know when it comes to encryption in the cloud.
Jul. 23, 2016 04:00 PM EDT Reads: 2,305
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
Jul. 23, 2016 04:00 PM EDT Reads: 1,982
What are the successful IoT innovations from emerging markets? What are the unique challenges and opportunities from these markets? How did the constraints in connectivity among others lead to groundbreaking insights? In her session at @ThingsExpo, Carmen Feliciano, a Principal at AMDG, will answer all these questions and share how you can apply IoT best practices and frameworks from the emerging markets to your own business.
Jul. 23, 2016 03:45 PM EDT Reads: 1,508
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
Jul. 23, 2016 03:30 PM EDT Reads: 1,841