U.S. fund ValueAct discloses 5.7 stake in Calgary fertilizer giant Agrium

CALGARY – San Francisco-based fund ValueAct Capital has discloses to U.S. regulators that it has acquired a 5.7 per cent stake in Calgary fertilizer producer Agrium Inc. (TSX:AGU).

In its 13D document, required whenever an investor buys more than five per cent of a company’s shares, ValueAct does not specify whether it wants to see any changes at Agrium, saying only that the purchases were made in its “ordinary course of business” and for “investment purposes.”

On its website, ValueAct said its strategy is to buy large positions in firms that it believes are undervalued and work constructively with a company’s management team and board of directors to boost returns.

Last year, Agrium defeated a boardroom challenge from New York hedge fund Jana Partners following a protracted and often acrimonious proxy fight.

Jana pushed for several changes at Agrium. The proposal that garnered the most attention was to look at splitting up Agrium’s retail and wholesale businesses. Jana also wanted Agrium to improve capital allocation, costs, disclosure in its retail business and corporate governance.

Agrium vice president Richard Downey says the company met a couple of times with ValueAct since the summer and there’s nothing to suggest another battle is brewing.

“Meetings have been good. They’ve been constructive and cordial and they describe themselves as a long-term shareholder. They think Agrium’s good value and I would say they are looking for a return on their investment very similar to other investors,” he said.

“All investors have views and want to know more about the business. This is not really any different than any other investor meetings.”

Agrium shares were up more than eight per cent at $104.86 in mid-day trading Friday on the Toronto Stock Exchange.