This week Agrium shareholders elected its slate of directors hopefully putting to rest a brutal distracting 10 month proxy battle with corporation predator JANA Partners LLC. This has been a long slug fest that quickly got personal as JANA became more and more aggressive in its quest to break up Agrium to attempt to maximize shareholder value. All along JANA has been confident in the feeling that breaking up the manufacturing and retail arms of Agrium was the only way to unlock true shareholder value of the Calgary, AB based company.
JANA might not be going away but I am sure Agrium CEO, Mike Wilson will take some solace in this weeks victory. From the Calgary Herald:
Agrium CEO Michael Wilson told reporters following the vote that Jana “obviously chose the wrong target,” adding the results show shareholders are pleased with the company’s performance and direction.
“It’s been a long 10 months, and now we can go on and focus on what’s important to our shareholders — growing the company, continuing improving the way that we operate the company, looking at how we return capital to our shareholders, and embracing all kinds of new ways to expand shareholder value,” Wilson said.
Agrium is the largest ag-retailer in North America with vertically integrated supply of a product that is commonly short (nitrogen or UREA) due to the strength and growth of corn acres in North America. Agrium has what others want in this space. Adding Mayo Schmidt to the Agrium Board of Directors is only going to make the company an even stronger entity.
In my opinion JANA Partners LLC was only interested in the short term rise of the Agrium stock and then a quick return to boast its own return to partners. With the growth of private equity in the past ten years, hedge funds hold an immense amount of power at board room tables. Many financial analysts argue that Mike Wilson has done a find job managing Agrium and getting stock performance for the company. According to CNBC, out of 26 stock analysts reporting, 5 rate it a strong buy, 10 a buy, 9 a hold and 2 undecided. Not to shabby in my opinion.
The timing of this push by JANA Partners has always been strange to me due to the fact JANA Partners has been lobbying to spin off the ag-retail arm before the Viterra purchase has even been allowed to integrate into the CPS business. If spun off as JANA Partners has insisted, many of the CPS employees will of been purchased as independent retails, integrated into CPS, integrated with Viterra and then spun off from CPS all in under ten years. Talk about a difficult place to implement systems and get to know your fellow team members, never mind get peak company performance out of the retail arm.
Even though JANA Partners has been vocal after this weeks defeat that they are not giving up, I hope they do so that Agrium can focus on the operation of the company and ensuring that the acquisition of Viterra’s retail business can go as smoothly as possible for all the employees and channel partners involved. Please JANA, Just Go Away and find another company to wreck havoc in.