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Agrium to ignore biggest shareholder's business advice

Stockhouse Editorial
0 Comments| August 14, 2012

 Agrium Inc. (TSX:T.AGU, Stock Forum) said that it will continue to execute its integrated business strategy and that it will not spin off its Retail operations.

Agrium's statement follows media reports that a hedge fund, JANA Partners, has suggested that Agrium should split the company into separate retail and wholesale businesses.

According to published reports, the activist investor JANA Partners purchased nearly 5% of Agrium’s outstanding shares, making it the biggest shareholder of Agrium. 

According to the press release, the Calgary-based company’s strategy is to grow across the value chain through acquisition, incremental expansion of its existing operations and through the development, commercialization and marketing of new products and international opportunities.

"We are confident that Agrium shareholders will receive far greater value with less risk under the company's current strategy," said Michael Wilson, President and CEO. "Agrium's Board has carefully evaluated the idea of spinning off Retail and has unanimously determined that it is contrary to the best interests of the company and its shareholders.”

Agrium has increased its dividend nine-fold since December 2011, and recently announced a $900 million share repurchase program in connection with the sale of Viterra's Medicine Hat nitrogen facility.

The company's share price has increased 43% year-to-date, versus 12% for the S&P 500. 

Agrium Inc. is a major Retail supplier of agricultural products and services in North America, South America and Australia and a leading global Wholesale producer and marketer of all three major agricultural nutrients and the premier supplier of specialty fertilizers in North America.

On Tuesday morning, Agrium was trading at $95.53 a share. The company has a market cap of $15.1 billion, based on 158 million shares outstanding. The 52-week high and low was $98.16 and $63.93 respectively.


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