Montreal fund manager to vote for Agrium's board, says it disagrees with Jana

MONTREAL – A Montreal-based investment firm that manages about 2.3 million shares of Agrium Inc. (TSX:AGU) says it’s supporting the Calgary-based company’s current board in a proxy battle with U.S. fund manager Jana Partners LLC.

Letko, Brosseau & Associates Inc. says it has concluded Jana’s method of evaluating Agrium’s share performance ignores improvements since last June.

It also says the presence of Jana’s nominees would be “disruptive to Agrium’s business.”

The shares controlled by Letko, Brosseau represent just 1.2 per cent of Agrium’s stock. However, Agrium’s board has also recently received public support from British Columbia Investment Management Corp., with another one per cent.

Jana advocates splitting up Agrium, a move that the incumbent board rejects and is seeking to install its managing partner and four other nominees as directors at the company’s annual meeting on April 9.

“After careful consideration of the arguments and proposal put forth by Jana Partners LLC and a review of the record of Agrium over many years in terms of governance, business strategy and execution, we have decided to vote all our shares in favour of the board nominees proposed by Agrium,” Letko, Brosseau said in a statement issued late Monday.

“The impact of Jana’s proposals on the value of Agrium are, in our view, highly speculative. We find Jana’s choice of periods to measure share price performance misleading as it ignores the improved stock markets since June 2012.

“While we recognize their commitment to the company in their 7.5 per cent shareholding, their proposal to control over 40 per cent of the board seats in unreasonable. Their business plan is so different from the one being pursued by management that we are concerned that any Jana board representation would be disruptive to Agrium’s business. For these reasons, we have decided not to vote for any of their nominees.”