* ISS endorses two of Jana's five board nominees
* Glass Lewis advises clients to back all Agrium nominees
* Glass Lewis says Jana's arguments not as compelling as
(Recasts, updates with contrary ISS recommendation)
By Euan Rocha
TORONTO, March 27 The battle for Agrium Inc's
future is heating up ahead of an April 9 vote after the
two most influential proxy advisory firms disagreed on the
candidates shareholders should back in the election of Agrium's
board of directors.
Institutional Shareholder Services recommends clients back
two of the five nominees proposed by dissident investor Jana
Partners, putting it at odds with a Glass Lewis endorsement of
all 12 of Agrium's board nominees.
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 favors the
status quo and highlights a steep rise in its share price as
evidence that it is on the right track.
The Glass Lewis recommendation follows similar views from
smaller firms like U.S.-based Egan-Jones and UK-based Pensions
Investment Research Consultants.
The conflicting views could cloud the outcome of a crucial
shareholder vote on April 9. Proxy advisory firms like ISS and
Glass Lewis advise institutional investors ahead of shareholder
votes and their reports very often sway votes for or against
management in proxy battles.
ISS, noting that Jana makes a compelling case for change at
Agrium, a fertilizer maker and farm products retailer, endorses
Jana nominees Barry Rosenstein and David Bullock.
New York-based hedge fund Jana has been locked in a war of
words with Agrium for months.
Glass Lewis advised its institutional investor clients to
back Agrium's nominees over Jana's five-member slate as it
believes that Agrium had presented a "more compelling case" than
the arguments put forward by Jana.
"We are pleased that Glass Lewis has recommended that its
subscribers support Agrium's slate of director nominees," said
Agrium's chairman, Victor Zaleschuk, in a statement.
Jana was not immediately reachable for comment.
The Glass Lewis recommendation comes close on the heels of
public support for Agrium's own nominees from some of its major
Investment management firm Letko, Brosseau & Associates,
which owns about 1.5 percent of Agrium's outstanding stock, last
week said it would back Agrium's nominees. Another shareholder
in Agrium, British Columbia Investment Management Corp, also
sided with the company this month, saying it believed that
Agrium's current board was providing effective oversight.
Agrium shareholders have already begun voting, but some big
investors were awaiting a recommendation from the proxy
The proxy fight is the latest high-profile battle led by an
activist investor seeking to shake up the board of a top
Canadian company. Last year, U.S. investor Bill Ackman, using a
similar playbook to the one Jana is using, shook up the board of
Canadian Pacific Railway and installed his hand-picked
candidate as the railroad company's chief executive officer.
Jana itself has in the past won campaigns at companies such
as Marathon Petroleum Corp and McGraw-Hill Cos Inc
But Jana faces an uphill battle convincing fellow
shareholders of the merits of its case against Agrium. Agrium's
stock has more than quintupled in value in the last eight years,
a fact Agrium repeatedly highlighted in statements to its
(Reporting by Euan Rocha; Editing by Matt Driskill and Kenneth