What follows is an excerpt from Canaccord Wealth Management’s Morning Coffee report.
Agrium Inc. (TSX: T. AGU, Stock Forum) (NYSE: AGU, Stock Forum) went on the offensive Monday, defending itself against Jana Partners LLC, AGU’s largest shareholder with a 6% interest, who has been trying to shake things up at the agricultural nutrients maker.
Jana has proposed a slate of five new directors for election to AGU’s board and plans to meet with any interested AGU shareholders over the next couple of weeks.
Jana has five unresolved issues, dubbed the Five Cs, with AGU. They are as follows:
- Cost management
- Capital allocation
- Conglomerate structure
- Corporate governance.
Mike Wilson, Agrium’s Chief Executive Officer was quoted by the Financial Post in saying. “The bottom line is Jana just doesn’t understand our business, and the ideas they are proposing don’t make sense. The best decision they ever made was investing in Agrium, because we’re a good, sound company.”
With AGU shares trading near ALL-Time highs, it’s tough to argue that management doesn’t know what they are doing.
On Tuesday, Agrium was down 1% to $113.10, leaving the company with a market cap of $16.89 billion, based on 149.3 million shares outstanding. The 52-week range is $116.38 and $77.50.