Why is former agriculture minister at centre of shareholder fight with Agrium?

Lyle Vanclief seems an unlikely candidate to be embroiled in the acrimonious battle between an aggressive New York City investment fund and Agrium Inc., a Canadian agribusiness success story.

Even odder on the surface is that the former Ontario-based federal agriculture minister is on the side of the New York investor, Jana Partners, that is going after the Canadian agribusiness icon. With six percent of Agrium shares, Jana is the largest single shareholder.

In November, Jana nominated Vanclief as one of five directors it wants on the 11-member Agrium board. Agrium is fighting back, and a decision by shareholders will come in May.

Jana wants to use its largest-shareholder status as leverage to convince other shareholders that the Calgary-based farm input supplier giant needs a shakeup. It wants Agrium to increase its shareholder returns and value and separate its production andwholesale fertilizer and farm chemical business from its rapidly expanding retail network.

Agrium leadership vows fierce resistance and even if Jana manages to get directors on the board, it promises to be a bitter and dysfunctional body as the two sides wrestle for control.

So why would 69-year-old Vanclief, who is enjoying retirement with good income and travel, nine years out of the acrimony of politics and living comfortably in the Belleville area farmhouse where he lived as a vegetable and hog farmer before entering politics in 1988, want to enter that kind of bitter political and corporate arena?

He is not saying, referring all questions about the issue to Jana. They like to speak with one voice.

Fair enough.

So why would this American-based investment adviser company with a strong bottom-line objective want this former Canadian farmer and politician on their slate of potential board members when one of their big issues is the need for Agrium to separate its wholesale and retail divisions?

He has no significant background in agri-retailing and no particular expertise in the corporate politics about to unfold.

Jana made it sound simple in its November announcement about the slate of nominated candidates.

“(Vanclief) will bring to the board his experience dealing with complex agricultural issues in government as well as his prior direct experience operating a commercial farm,” said the statement from New York.

Background conversations with players in the power play point to several reasons for his nomination.

Four of the five proposed directors are American. Vanclief would add Canadian content and a recognizable name with 15 years in Parliament and more than six years as agriculture minister. He is also the only one with two decades of farm experience during which he was a customer of agri-supply companies.

And while he does not have extensive experience as a boardroom brawler, he was agriculture minister in a federal government increasingly dependent on urban voters and yet managed to extract billions of dollars in payments for farmers during his years in office.

Cabinet brawls cannot be any less fierce or complicated than boardroom brawls, and Vanclief certainly has experience there.

Besides, he has a clear understanding of the nuances of Canadian politics and regulation, a valuable asset for any company living in Canada’s highly regulated agri-product world.

One Jana insider has said Vanclief is “the perfect fit.”

It is easy to see why.

About the author


Stories from our other publications