After bitter proxy battle, Jana accuses Agrium of persuading shareholders to change votes
Activist hedge fund Jana Partners has failed to gain a seat on Canadian agriculture supplies company Agrium at its annual shareholder meeting after months of increasingly bitter accusations between the investor and the company’s management.
Shareholders voted to re-elect all 12 incumbent board members, rejecting the five candidates fielded by Jana. According to Agrium, the Jana candidates received, on average, less than 25 percent of the vote each, excluding Jana’s votes. Agrium said 116 mn shares were voted, representing 77 percent of the eligible shares. Jana disputes the results.
‘This vote shows overwhelming support for Agrium and its integrated strategy,’ says Mike Wilson, Agrium’s president and CEO, in a note to investors. ‘We will continue to focus on maximizing shareholder returns by driving continuous improvements to our base businesses, pursuing value-added growth opportunities across the crop input value chain and returning capital to shareholders.’
Agrium’s victory over Jana Partners at the annual meeting came after Jana accused Agrium of ‘vote buying’ and Agrium accused Jana of attempting to stack the board of directors with members who would favor Jana’s interests. At the root of the dispute is Jana’s insistence that the company, which is the biggest retailer of crop nutrients to US farmers and a major fertilizer producer, spin off its retail arm and potash operations, approve board members with greater industry experience and overhaul a number of other company policies.
The clash resumed immediately after the shareholder vote, with Jana Partners disputing the results and saying it had actually won a board seat. Jana accused Agrium of lobbying shareholders to change their votes after the voting deadline and then revoking enough votes to change the results.
‘We received 59 mn votes for one or more of our nominees, including ‒ it appeared ‒ enough votes for David Bullock and me to be elected to the board of directors,’ says Barry Rosenstein, managing partner at Jana, in a news release. ‘We have learned, however, that after the vote deadline, enough votes for us were apparently revoked to change the outcome. We don’t know why otherwise the company would have started lobbying people after the deadline to change their votes. Usually when an election is over and you have more votes than the other side, you have won.’
In the lead-up to the vote, Jana accused Agrium of vote buying, with the company’s offer to pay 25 cents per share to brokers and advisers whose clients voted for its board member nominees at the shareholder meeting. Agrium accused Jana of trying to stack the board with directors who would do Jana’s bidding, saying the investor offered to pay board members its own funds
