CALGARY, ALBERTA -- (Marketwire) -- 03/27/13 -- ALL AMOUNTS ARE STATED IN U.S.$
Agrium Inc. (TSX: AGU) (NYSE: AGU) today commented on the report issued today by Institutional Shareholder Services Inc. ("ISS"). The report's recommendation puts ISS at odds with the unequivocal statements of support for Agrium's Board nominees issued over the past week by three of Agrium's largest institutional shareholders: Letko Brosseau & Associates, Aimco and bcIMC.
The report's recommendation also puts ISS at odds with three other proxy advisory firms, including Glass, Lewis, a leading international proxy advisory firm, Pensions Investment Research Consultants (PIRC), a UK-based proxy advisory firm, and Egan-Jones. It also puts ISS at odds with the views of the equity research community, which has strongly endorsed Agrium's integrated strategy, as well as the company's analysis of JANA's flawed ideas, and at odds with independent corporate governance experts, who have severely criticized JANA's 'golden leash' pay arrangements for their short-term orientation and for undermining notions of director independence.
As an equity research analyst from CIBC wrote this morning, "ISS' reasoning includes that JANA's goal is NOT to break up (Agrium) (clearly ISS drinking a bit of JANA's "Koolaid" as JANA has been very clear with myself and others from day 1 that AGU's break-up was JANA's exit strategy)."
Likewise, ISS has accepted JANA's portfolio weighted methodology, which has been rejected by all 29 equity research analysts covering Agrium. Glass, Lewis has said "JANA relies upon a poorly justified weighting methodology in order to arrive at figures sufficient to support the remainder of its arguments. We regard this analysis as misleading at best, and believe shareholders should refrain from relying on any conclusions derived therefrom."
"In addition to being offside with the equity research community, leading independent governance experts, three other proxy advisory firms and many of Agrium's largest institutional shareholders, ISS' decision runs counter to its own published criteria for evaluating short-slate dissident campaigns in Canada," said Agrium Board Chair Victor J. Zaleschuk. "Those criteria require a dissident to demonstrate that Board change is warranted. Having completely failed this test, there is no basis for JANA to receive even a single board seat. It is also shocking that ISS - as a self-proclaimed arbiter of good governance - would effectively endorse JANA's 'golden leash' payment scheme. This decision puts ISS way outside the mainstream of the corporate governance community. ISS simply got this one wrong."
"A significant number of large institutional funds have told us they will override any ISS recommendation in favor of JANA and vote instead for Agrium's Board nominees on the white proxy. As with several other situations where ISS has supported dissident slates only to later see those dissident slates defeated by shareholders, we are confident that our shareholders will rightly and roundly defeat JANA's nominees," said Mr. Zaleschuk.
JANA is seeking to break up Agrium and implement other ideas that Agrium has demonstrated would destroy shareholder value. JANA has provided no credible evidence to the contrary and has little support from other Agrium shareholders or the equity research community. JANA has also failed to demonstrate that its dissident nominees can be trusted to act in the best interests of the corporation given their explicit and short-term oriented financial ties to JANA.
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