Is it time to sell Agrium shares?

[boarderbloke]

[URL="http://www.bnn.ca/News/2013/2/12/Agrium-appoints-new-directors-as-Jana-rejects-settlement.aspx"]Agrium Appoints Mayo[/URL]

[Hopperbin]

What problem does Jana Partners have with Mayo?

[wilagro]

I wouldn't hire Mayo to any board of directors.

[BTO_farmall]

What The F#ck is This!?!?!?!?!? Someone Empty Out on That AssHole Mayo, CLOSE RANGE!!!!!!!!!!!!!!!!!!!!!!!!!

[hobbyfrmr]

Depends on what price you bought them at.
Looking at charts, the shares are the highest they
have been in 1,3 and 5 years.
I have no thoughts about how the mayo
announcement will affect them. I just think about
taking profit.
Sell them for a profit, then step back and look for
a new entry position .
Maybe a little internal squabbling will drop share
values a bit, the, then, with mat gas prices low
and fert prices high, record profits after seeding,
I am guessing by July/August.
I have no real experience in buying shares, I kind
of fool around and look at charts. I would like to
take classes one day.
Any more insight would be appreciated.

[Hopperbin]

But Mayo will likely agree to part out the company for a profit and that is just what Jana Partners wants to net a huge profit on their shares. Not really sure what the split up company is worth but thanks to Jana the share price is up. Couple weeks ago UUU was bought out by its major shareholder well under priced I would have been screaming if I owned some of them. Sorta opposite to what Jana does. I still think It should be illegal somehow with what they are doing or how they are doing it. Both companies were underpriced. Jana does seem to have a nack for increasing share value. Not always in the best interest of the company.

[Hopperbin]

You see in this case they want costs cut I think in such a way that maintenance will not be done, they can show more profit on paper for one year. Then part her out and take the profit. Just my guess and my guess says hold the shares.

[HappyFarmer]

Maybe your explain your reason for that
wilagro. If you consider the FACTS that
Mayo is a guy who took a company that
was nearly broke, that everyone had
counted out as being finished, and
turned them in to the most profitable ag
companies in Canadian history!!!!!

Ya, that's a bad track record. Why would
anyone want someone like that. Give me a
break.

[wilagro]

HappyFarmer: Its a long story and you wouldn't want to hear what I would relate. What was done is done and there is no point digging up old situations which can't be reversed.

We (farmers) all lost something irreplaceable when our collective wheat pools went down the tube. The day when all of our equities were converted to shares in a non-Co-op was a sad, sad day indeed.

[rhoff]

I actually think Jana is in the right on this one. I
hate it when companies use a good business to
subsidize a bad one. They maybe don't need to
spin off retail but in the least improve financial
transperancy so it's easier for shareholders to
assess operating performance of each unit. Jana
partners have a history of cooperating with
management to make changes that improve
shareholder value. But this time he's been
scorned so there into a new territory. You might
be a genius at running a fertilizer manufacturer or
retail but that doesn't mean you understand how
to allocate capital,both are important in a large
profitable company. If anyone is looking at this as
a trade take note of what CP did since Bill
Ackman got involved. I will watch from the
sidelines however.

[rockpile]

Rhoff, I have pretty intimate knowledge of Agrium's
operations through a friend who is in management
and any insinuation that the retail side isn't making
money is hogwash. And they are going to change
how they report costs and revenues in production,
asset management, wholesale and retail. Jana is
looking to make a quick buck for 'their'
shareholders by liquidating the meat and potatoes
out of Agrium and then leaving town.
Wil, I don't think you can blame Mayo for what
happened to the Pools. There was a BOD who
governed and had ultimate say in these matters.
Personally, I blame the member/owners who sat on
their asses and without foresight asked 'what's in it
for me, right now, never mine the future'. Just how I
see it.

[rhoff]

Nobody is disputing whether the retail side is
profitable. But turning a profit isn't the only
objective,money managers also care about a
decent return on equity which is hard to
accomplish if you over pay for retailer. A money
manager who is one of the largest shareholders of
Agrium is'nt going to take your friends word for it.
That's the source of the debate -they want to see
how each business performs on a stand alone
basis through proper transperancy,which makes
perfect sense to me. When Bill Ackman showed
up at CP he wanted two board seats and a review
of the companies strategy,they replied with "get
lost". Well he ended up a lot more board seats
and the CEO sent packing because they were too
proud to listen.
If Agriums retail arm is as good as they say it is
then they can own shares of both companies.

[ColevilleH2S]

If the largest shareholder doesn't get a
say on who sits on the board, there is
something rotten with the institution.
They are forgetting that ownership
should always have the final word.

[rockpile]

rhoff, I wouldn't compare CP with Agrium. CP is an
old established empire who always shunned
innovation and new technology. Agrium is a recent
arrival and has managed a growth and success
strategy that is quite remarkable. I don't see 6%
ownership as a 'big wow' by Jana that should give
them any kind of special treatment. I see them as
carpetbaggers looking for a quick buck. They don't
create or make wealth from anything, much like
Bain Capital. Final question, if Agrium was forced to
sell their retail division, would it cause more or less
competition for the farming community? Who is in a
position to buy them out? And who would be
interested? And why?

[rhoff]

Rockpile
Your description of CP is probably quite accurate.
My point in comparing them is that Ackman was
also a nobody and they shunned him,he then
completely dismantled the board with 16%
ownership. 6% doesn't sound like much but it only
takes one more shareholder of similar size to
agree with him to cause real change. As far as the
argument that they don't create wealth-that's the
job of management on behalf of the
board/shareholders if the shareholder doesn't
believe managements strategy creates wealth
then he should move along or remove board
members.As far as your question of potential
suitors I thInk the breakup would look a lot like
Encana/Cenovas where shareholders are given a
share of the new listed company and can decide
whether to hold or sell. I assume many would hold
and there might be an appetite in the investment
community for a ag-retailer. So they don't have to
find a new buyer especially if they spin it off
gradually like Wendys did with Tim Hortons. I
assume if money managers saw a retailer with a
poor ROE they would conclude the underlying
assets to be overvalued and sell there shares in
the new company.