TORONTO, April 5 The Canada Pension Plan
Investment Board, one of the world's largest pension funds, said
it has voted to support Agrium Inc's board
nominees ahead of a shareholder meeting next week, in a blow to
activist investor Jana Partners.
The Canadian fertilizer maker and farm products retailer
Agrium has been locked in a war of words for months with
activist investor Jana Partners LLC, a New York-based hedge
Jana named a slate of five nominees for election to Agrium's
board and the battle is set to come to a head at Agrium's
shareholder meeting on its home turf in Calgary, Alberta, on
A spokesman for Jana was not immediately available for
comment on the CPPIB decision. A spokesman for Agrium said the
company was pleased with the decision.
Jana, Agrium's largest shareholder with a 7.5 percent stake,
wants Agrium to spin off its farm retail arm, improve its use of
capital and cut costs, among other things. Agrium, however,
favors the status quo and highlights the steep rise in its share
price as evidence that it is on the right track.
The Canada Pension Plan Investment Board (CPPIB), which
manages net assets worth more than C$172 billion ($169.50
billion), said on its website that it decided to back Agrium's
slate of nominees.
It said "Jana has failed to make a compelling case for
change to Agrium's board of directors."
CPPIB said that while it agrees there are opportunities for
improvement, "the dissident's nominees do not represent the best
alternative for optimizing long-term value creation,
particularly in light of Jana's proposed director compensation
Agrium has questioned the independence of Jana's nominees,
stating the "dissident nominees have agreed to accept special
incentive payments from Jana for serving on Agrium's board."
Jana in return argued that its directors only stand to gain
to the extent that all shareholders gain.
Agrium has in recent weeks won public support from a number
of major investors and proxy advisory firms, but the company
suffered a partial setback last week, after influential proxy
advisory firm Institutional Shareholder Services (ISS) advised
that its clients back two of the five nominees proposed by Jana.
Although it is unclear exactly how significant CPPIB's stake
in Agrium is, the fund's move does have major implications, as
it is a client of ISS. The move indicates that some top clients
of the advisory firm may be willing to go against ISS' advice in
this particular proxy battle.
CPPIB, in its proxy voting principles and guidelines, says
"We review the research and recommendation provided by ISS and
if we disagree with the recommendation, our vote is changed."