Viterra chided by largest shareholder for failing to reform board of directors

Grain handler and seed supplier Viterra Inc. was publicly lambasted Tuesday by its largest shareholder, which says the board of directors lacks what it takes to grow the major agribusiness globally and has not heeded investor concerns.

Alberta Investment Management Corp., or AIMCo, owns 17 per cent of Viterra's shares and has been its single-largest shareholder since 2009.

AIMCo said it has approached Viterra repeatedly over the past 18 months about board changes, and warned it would seek a special shareholder meeting if Viterra did not co-operate.

"AIMCo does not believe the current Viterra directors are prepared to enact meaningful change for the benefit of all stakeholders," AIMCo chief executive officer Leo de Bever said in an emailed statement.

"Among these concerns, AIMCo does not believe the current Viterra board has the required skills or expertise to meet the company's leadership needs as a growing international agribusiness."

Last week, Viterra (TSX:VT) announced two directors of its board —Vic Bruce and Paul Daniel — won't seek re-election at the company's annual meeting March 8. In addition, the company hired two internationally recognized search firms to help find suitable replacements.

That did not satisfy AIMCo.

"(AIMCo) will not accept Viterra's vague plans for board renewal, further platitudes about seeking shareholder input, or closed-door processes on important governance issues," de Bever said.

"We have been a shareholder for over two years and we are disappointed with the board's unwillingness to accept meaningful shareholder input on these important concerns."

The Alberta pension fund's stake is worth just over $640 million, based on Viterra's stock market value of just under $3.8 billion.

Viterra offered little in way of response on Tuesday, saying in an emailed statement its nominating and corporate governance committee is considering AIMCo's grievances.

AIMCo is one of Canada's largest institutional investment managers, representing 26 pension, endowment and government funds including the Alberta Heritage Savings Trust.

"AIMCo is a proven long-term investor that strongly believes in the benefits of corporate governance and has a solid reputation as a trusted partner that works with companies to build successful businesses," de Bever said.

Viterra is one of Canada's largest grain-handlers and supplies farmers with seed, fertilizers and other agricultural products.

The company has also expanded internationally and has operations in the United States, Australia, New Zealand and several other countries.

"AIMCo remains committed to Viterra's long-term success," de Bever said.

AIMCo's push Tuesday is the second case of shareholder activism to take hold at a major Canadian company in the past week. On Friday afternoon, New York hedge fund Pershing Square disclosed it had taken a 12.2 per cent stake in Canadian Pacific Railway Ltd. in an effort to improve operations and finances at Canada's No. 2 railroad.

Relations between Canadian Pacific and Pershing appear to be much friendlier so far; the railway told employees on Monday it would sit down with Pershing to hear what it has to say.

In Tuesday trading on the TSX, Viterra shares rose 16 cents to $10.42.