JANA, Target Trade Barbs Over 'Scorched-Earth' Tactics

Aug 16 2012 | 11:04am ET

An already contentious battle between JANA Partners and a Canadian fertilizer company has turned nastier in the wake of a failed meeting between the two sides.

The activist hedge fund met with Agrium Inc., in which it holds a 5% stake, yesterday to push for a split in the company. Agrium has refused, and also this week asked analysts who cover it to compare the value its retail operations—which JANA wants severed from the rest of the company—to a different group of companies than previously used. The move would lower the retail arm's potential value as a separate company.

"We have watched in disbelief over the last few days as the management of Agrium has taken a scorched-earth approach to avoid any reasonable discussion of our proposals to unlock the true shareholder value potential of the company," JANA founder Barry Rosenstein wrote to the company's board of directors.

But according to Agrium spokesman Richard Downey, while the change was prompted by JANA's suggestions, it was not a nefarious attempt to artificially lower the value of its retail unit.

"We hadn't really done that much work on it, so part of the process the board went through was to hire an outside firm that specialized in this," he told Reuters. "There was nothing untoward."

Downey also rejected Rosenstein's claim that it was doing everything to avoid talking about JANA's proposals.

"The only accurate statements in JANA's letter are that Agrium is not going to spin off its retail business and that Agrium is always open to looking at ways to improve operating performance," he said.

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