CALGARY - Agrium Inc. (TSX:AGU) has appointed two new directors to its board, without consensus from activist hedge fund Jana Partners LLC, who has been battling for months to make changes at the Calgary-based fertilizer giant.
In a statement late Monday, Agrium says it has named David Everitt and Mayo Schmidt to the new positions.
According to the company, both men have extensive backgrounds in the agriculture sector in Canada, the U.S., and abroad.
Agrium says it had been in talks for the past three days with Jana in hopes of coming up with a compromise over its proxy battle.
Before the appointments, it says it had offered Jana the opportunity to name one of its own board nominees.
Agrium says the hedge fund had initially agreed, but then "at the last minute" said they wanted to appoint two of its own nominees.
The negotiations broke off late Monday.
"We are disappointed in Jana's decision to prolong this fight which it is certain to lose," said Agrium president and CEO Michael Wilson in a release. "Shareholders are clearly not supportive of Jana's initiative to break up Agrium."
But according to New York-based Jana, talks ended because the hedge fund does not think the new directors have enough experience, and address any "deficiencies" it had previously raised about Agrium's board.
Charles Penner, a partner at Jana, also says it also does not support Agrium's appointments because the company refused to "commit" to resolving their concerns with "capital allocation, cost management and working capital management."
Agrium had also turned down a request to do a "fair and unbiased review" of their strategy, said Penner.
In November, Jana announced it had wanted five of its nominees to join Agrium's board and had proposed breaking Agrium into separate retail and wholesale companies.
At the time, Wilson said Jana's prime objective was to split the company, which he said would result in "huge value destruction."
Since approaching the company privately in May, Jana has requested that Agrium cut costs, allocate capital more effectively, improve governance and disclose more information about its retail business.
Jana is now Agrium's largest shareholder, with a six per cent stake.
The appointments were announced after markets closed on Monday. Agrium shares are listed at $115, up 20 cents or 0.17 per cent on the Toronto Stock Exchange.
