S&P 500
7,615.80
-0.09%
Dow Jones
51,326.00
-0.09%
Nasdaq 100
30,657.60
-0.19%
Russell 2000
2,931.83
-0.04%
FTSE 100
10,379.30
-0.08%
Nikkei 225
68,559.20
+1.57%

Commodities & Metals

What Does ValueAct See in Taking an Activist Role in Fertilizers?

Photo of Paul Ausick
By Paul Ausick Updated Published
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

irrigation

Thinkstock
Hedge fund ValueAct Capital Management on Friday filed a Form 13-D with the U.S. Securities and Exchange Commission (SEC) disclosing the acquisition of 8.19 million shares of Canada-based fertilizer maker Agrium Inc. (NYSE: AGU). The acquisition amounts to 5.7% of Agrium’s common stock.

ValueAct’s founder and CEO Jeffrey Ubben rejoined the board of Valeant Pharmaceuticals International Inc. (NYSE: VRX) in late September after resigning the seat a few months early in order to pay more attention to the fund’s investment in Microsoft Corp. (NYSE: MSFT), which includes a seat on Microsoft’s board. ValueAct, the drugmaker’s second largest stockholder, holds a 5.6% stake in Valeant and has been a strong voice in favor of Valeant’s $53 billion takeover bid for Botox maker Allergan Inc. (NYSE: AGN).

This new investment in Agrium is “for investment purposes,” according to the SEC filing, but ValueAct is known for taking an active role in the companies it invests in. In 2013 it invested $2 billion in Microsoft and parlayed that stake of less than 1% into a board seat.

After hitting an all-time high of nearly $115 a share in early 2013, shares are down about 25% since. Agrium is likely a better company than its numbers show, and ValueAct probably believes it has spotted a good opportunity here. The fertilizer maker is adding to potash capacity at its Vanscoy mine after an unexpected closure was seized as an opportunity to expand, and the company’s nitrogen production is coming back online after a scheduled turnaround.

Agrium’s shares traded up more than 7% shortly after the opening bell Friday morning, at $92.21 in a 52-week range of $82.02 to $97.97.

ALSO READ: Metals and Mining Suffer Worst Stretch Since 1990s: Is a Turnaround Imminent?

DISCLOSURE:
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org). Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees. Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org). There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options  Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation.
Follow 24/7 Wall St. on Google
Photo of Paul Ausick
About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

Continue Reading

Paul Ausick |

Hedge Fund Claims Success in Board Fight at Agrium

thinkstockJana Partners said this morning that it “appears” as if two of its candidates have been elected to the board…

Douglas A. McIntyre |

Proxy Battle Begins in Fertilizer Deal (AGU, CF, TRA)

Canadian fertilizer giant Agrium Inc. (NYSE:AGU) today filed its definitive proxy materials with the SEC in its effort to acquire…

Douglas A. McIntyre |

Opportunism Everywhere in Fertilzer Business (CF, AGU, TRA, MOO)

Fertilizer maker CF Industries Holdings, Inc. (NYSE: CF) this morning rejected a buyout offer from Canada’s Agrium, Inc. (NYSE: AGU).…

Jon C. Ogg |

Cargill to Sell Stake in Mosaic, Setting Off Another Fertilizer Chase (MOS, BHP, POT, AGU, MON, RIO, VALE)

Time to get ready for another chase scene in the fertilizer business. Privately held agricultural giant Cargill Inc. plans to…

Douglas A. McIntyre |

Fertilizer’s Merger Triangle (AGU, CF, TRA)

Canadian-based fertilizer maker Agrium Inc. (NYSE: AGU) made an unsolicited offer for CF Industries Holdings, Inc. (NYSE: CF) earlier this…

11 Crucial Things to Consider About Warren Buffett’s New Apple Stake
Jon C. Ogg |

11 Crucial Things to Consider About Warren Buffett’s New Apple Stake

With a 4% rally in Apple on the heels of news of Berkshire Hathaway's $1 billion stake, there are several…

Jon C. Ogg |

New Round of M&A in Ag and Potash (AGU, CF, POT, MON, MOS)

Canadian agribusiness giant Agrium Inc. (NYSE:AGU) lost out on its bid for CF Industries Holdings, Inc. (NYSE:CF) earlier this year,…

cgblaine22 |

Why Teva May Be Back From the Dead

Two analyst upgrades on Friday, a new CEO and a 33% increase in its stock price since November may be…

Campbell Soup Turnaround Shows Signs of Life
Jon C. Ogg |

Campbell Soup Turnaround Shows Signs of Life

Campbell Soup is a turnaround story, and it turns out that there finally may be some light at the end…

Top Gaining Stocks

Hewlett Packard Enterprise
HPE • Vol: 153,197,465
Enphase Energy
ENPH • Vol: 8,360,053
Corning
GLW • Vol: 18,152,646
Alexandria Real Estate Equities
ARE • Vol: 4,337,015
Aptiv
APTV • Vol: 6,761,325

Top Losing Stocks

Trade Desk
TTD • Vol: 21,905,513
Intuit
INTU • Vol: 7,383,018
Coterra Energy
CTRA • Vol: 73,319,495
Cboe Global Markets
CBOE • Vol: 5,000,011
HP
HPQ • Vol: 29,259,826