JANA Partners Releases New
Presentation To Agrium Shareholders
Presentation and Updated
Materials Available at www.JANAAguAnalysis.com
NEW YORK, Jan. 23, 2013
/PRNewswire/ -- JANA Partners LLC today released a new presentation for
shareholders and other new materials in conjunction with meetings JANA and
its board nominees are holding this week with shareholders of Agrium Inc.
("Agrium") (TSX / NYSE:
AGU) across Canada. JANA, which is Agrium's largest shareholder, has
proposed a slate of five new directors for election to Agrium's Board:
former United Agri Products (UAP) CFO and COO
David Bullock , former Brenntag CEO
and current board member
Stephen Clark , former MSC Industrial
CEO and current Chairman
Mitchell Jacobson , former Canadian
Minister of Agriculture The Honourable
Lyle Vanclief , and JANA Managing
Partner Barry Rosenstein.
JANA believes these nominees can address
crucial deficiencies in the current board, including a lack of legitimate
distribution experience and a failure to pursue obvious value creation
measures for shareholders until pressed to do so, which have prevented
Agrium from realizing its full value creation potential. JANA's new
presentation and other updated information are available at
"Agrium's board has been living in an
alternate universe where shareholders have no desire to explore the many
ways we've identified to unlock value," said Rosenstein. "All along we
have been speaking to shareholders and seeing a much different picture,
with just about every shareholder we speak to wanting to see a serious
discussion of these issues and a large and growing number who support
enhancing the board so Agrium can reach its full potential."
While Agrium has moved to address certain
issues first raised privately by JANA – including boosting its capital
return to shareholders and beginning to improve disclosure relating to its
retail business ("Retail") – JANA's new presentation zeroes in on the
remaining issues previously identified by JANA which the board has yet to
fully address, and which JANA has broken down into "5 C's":
Costs: Managing costs at
Retail and corporate overhead.
Controls: Aligning performance
targets and incentives with shareholder value creation, and providing
sufficient disclosure for shareholders to assess performance.
Capital Allocation: Committing
to a long-term shareholder-friendly capital return plan, improving
execution of M&A and investments, and reducing Retail working capital.
Conducting a fair and unbiased review of Agrium's structure with the
sole purpose of maximizing shareholder value.
Corporate Governance: Adding
an enhanced shareholder perspective and experienced oversight to the
board, which has had serious corporate governance lapses following
Each of JANA's candidates has invested
personally in Agrium and will also be incentivized based upon the
performance of Agrium shares, and each meets the independence requirements
of the Canadian Business Corporation Act, the NYSE and Agrium's governance
guidelines. JANA has stated that it will work with the current Board to
ensure that any changes in composition will not raise regulatory issues
for or burdens on Agrium.
Biographical Information for JANA's
David Bullock : Mr. Bullock
was the Chief Financial Officer of Graham Packaging Inc. ("Graham
Packaging"), a global supplier of plastic packaging, from 2009 to 2011,
where he led the Company from private ownership under Blackstone to a
public listing and its ultimate sale to Reynolds Group at a substantial
premium to its IPO price.
Prior to Graham Packaging, Mr. Bullock was
Chief Financial Officer (2003-2007) and Chief Operating Officer
(2007-2008) of United Agri Products, Inc. ("UAP") which, prior to its
acquisition by Agrium, was the largest independent distributor of
agricultural input products in the U.S. and
Canada with approximately 350 stores. At UAP, Mr. Bullock
was responsible for improving the business including the creation and
implementation of its supply chain and logistics strategy and
implementation of its core operating systems and controls. UAP was cited
by Agrium's financial advisor, Morgan Stanley, as the best comparable peer
for Agrium's Retail business (see Agrium's
August 20, 2012 Investor Update, page 9).
Mr. Bullock was a key member of the management
team that created substantial value by separating UAP from agricultural
conglomerate ConAgra Foods, Inc. in an acquisition by Apollo Management
and then turning UAP around through substantial operating improvements.
Mr. Bullock also oversaw the subsequent public offering of UAP and its
eventual sale to Agrium at a substantial premium to its IPO price. The
successful turnaround of UAP has made it one of the top performing
Apollo's history. Prior to UAP, Mr. Bullock held management
positions with FMC Corporation. Mr. Bullock has a B.S. from
Lehigh University and an M.B.A. from
According to JANA, during Mr. Bullock's tenure
at UAP from 2002 to 2008, the company experienced significant operating
profit growth and margin expansion, driving EBITDA growth of more than 16%
Stephen Clark : Mr. Clark is a
member of the Supervisory Board of Brenntag AG. Mr. Clark had previously
served as Chief Executive Officer from 2006 to 2011 and as President of
Brenntag North America from 1990 to 2006. Mr. Clark managed Brenntag
during its private ownership by two different private equity investors
(Bain Capital and BC Partners), and then led the company through a
successful public offering in 2010. Brenntag AG is the global market
leader in distribution for industrial and specialty chemicals with over
$12 billion in total sales and an enterprise
value of more than $8 billion. Brenntag was
cited by Agrium's financial advisor as a relevant distribution peer for
Agrium's Retail business (see Agrium's August
20, 2012 Investor Update, page 10). Mr. Clark is a graduate of
Pennsylvania State University.
According to JANA, during Mr. Clark's tenure
as CEO from 2006 to 2011, Brenntag grew EBITDA by more than 15% per year
and the company experienced significant margin expansion despite a
challenging macroeconomic environment, and since the company's IPO,
Brenntag shareholders have realized a total annual return of 25% per year
through November 16, vs. a 3% annual return
for the STOXX 600 index over the comparable period.
Mitchell Jacobson : Mr.
Jacobson is Chairman of the Board and one of the principal shareholders of
MSC Industrial Direct Co., Inc. Mr. Jacobson previously served as Chief
Executive Officer of MSC from its formation as a public company in
October 1995 to
November 2005, and has since served as its Chairman and remained
its largest shareholder. MSC today has a $4 billion
market capitalization and is one of the largest distributors of a broad
range of metalworking and maintenance, repair and operating products with
over 600,000 unique SKUs and over 100 branches in the United States. MSC
was also cited by Agrium's financial advisor as a relevant distribution
peer for Agrium's Retail business (Agrium's
August 20, 2012 Investor Update presentation, page 10, footnote 1).
In addition to his experience with MSC, Mr.
Jacobson is an investor and board member of privately held HD Supply,
Inc., a leading industrial distributor for professional customers in the
infrastructure, maintenance, repair and improvement and specialty
construction markets with approximately $8 billion
in annual sales. He is a member of the Board of Trustees for both
New York University and the
New York University School of Law and is a
member of the Investment Committee of the New York
University School of Law Foundation. He serves as a Trustee for New
York-Presbyterian Hospital and is a member of the Hospital's Investment
Committee as well as Co-Chair of the Hedge Fund Subcommittee and a member
of both the Asset Allocation and Private Investments Subcommittees. Mr.
Jacobson is a graduate of Brandeis University
and the New York University School of Law.
According to JANA, under Mr. Jacobson's
leadership, MSC has grown operating profit more than 12 fold since its IPO
through August 2012, representing compound
annual growth of 16%, in the process realizing operating leverage and
margin expansion, and over this 17 year time period MSC's shareholders
have realized a total annual return of 12% per year through
November 16, vs. a 7% annual return for the
S&P 500 index over the comparable period.
The Honourable Lyle Vanclief, P.C., P.AG
(Dist): Mr. Vanclief was formerly the Minister of Agriculture and
Agri-Food Canada (1997-2003) and a Member of Parliament (1988-2004). In
his role as Minister, Mr. Vanclief had responsibility for a
$140 billion industry and oversaw a Ministry
with 12,000 employees. His responsibilities as Minister included
stewardship of various Canadian federal agencies including the Canadian
Food Inspection Agency, Farm Credit Canada, the Canadian Dairy Commission,
the Canadian Grain Commission and the National Farm Products Council.
Prior to his government service, Mr. Vanclief
spent twenty-two years as an entrepreneur in the agriculture industry,
during which time he built Willowlee Farms Limited into a diversified
fruit, vegetable, grains, oilseeds and livestock operation in Prince
Edward County, Ontario. Mr. Vanclief currently serves on the board of
Bioniche Life Sciences Inc. Mr Vanclief is a graduate of the
University of Guelph in Crop Science, a
professional Agrologist, a Fellow of the Agricultural Institute of
Canada, a graduate of the Directors Education Program at the
Rotman School of Management (University of Toronto)
and is an Institute certified director with the professional designation
ICD.D. Currently he provides agricultural and agri-food consulting. Mr.
Vanclief was inducted into the Canadian Agricultural Hall of Fame in 2010.
Barry Rosenstein is the founder and
Managing Partner of JANA Partners LLC, an investment advisor with
approximately $3.5 billion in investments
and commitments, founded in 2001, and registered with the United States
Securities and Exchange Commission. JANA is a recognized leader in
creating value through shareholder activism and has on numerous occasions
successfully challenged boards and management to focus on creating
shareholder value, including with respect to Marathon Petroleum, TNT,
McGraw Hill, El Paso,
Charles River , CNET, Kerr-McGee
Corp., Artesyn Technologies, Houston Exploration Company, InterCept and
SourceCorp. Mr. Rosenstein has served on several public boards including
the boards of Convergys Corporation and Copart, Inc.
Prior to establishing JANA, Mr. Rosenstein was
the founder and Managing Partner of Sagaponack Partners, a private equity
fund. Mr. Rosenstein began his career as an investment banker specializing
in mergers and acquisitions with Merrill Lynch in
New York and was also a principal in charge of corporate
Asher Edelman 's Plaza Securities
Corporation. Mr. Rosenstein graduated from Lehigh
University (1981) Phi Beta Kappa and earned an M.B.A. from the
University of Pennsylvania's Wharton School of
Business (1984). Mr. Rosenstein is a trustee of Brown
University, the US Olympic Foundation, and the 92nd Street Y in
New York City, and a board member of Make the Road New York.
All $ amounts refer to US dollars.
JANA has not sought or obtained consent from
any third party to the use herein of previously published information. Any
such information should not be viewed as indicating the support of such
third party for the views expressed herein.
Except for the historical information
contained herein, the matters addressed in these materials are
forward-looking statements that involve certain risks and uncertainties.
You should be aware that actual results could differ materially from those
contained in the forward-looking statements. JANA does not assume any
obligation to update the forward-looking information.
Information in Support of Public Broadcast
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
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
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 has entered into agreements with
Kingsdale Shareholder Services Inc. ("Kingsdale") and The Laurel Hill
Advisory Group Company ("
Laurel Hill ") pursuant to which
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
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.
For more info contact JANA Partners LLC at
(212) 455 0900
SOURCE JANA Partners LLC
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