Jana Partners LLC announced it had increased its stake in Agrium, the Canadian network of farm-supply outlets and fertilizer wholesaler, and that it had chosen five nominees to dislodge the current Agrium board.

The current move is an escalation of Jana's strategy to force Agrium to spin off its wholesale fertizer division, which Jana suggests is undervalued.

The nominees include Jana Managing Partner Barry Rosenstein, David Bullock, a former chief financial officer of Graham Packaging Inc., and Stephen Clark, the former chief executive officer of German chemicals distributor Brenntag AG (BNR), Jana Partners announced. The other two nominees are Mitchell Jacobson, chairman of MSC Industrial Direct Co. and Lyle Vanclief, a former Canadian minister of agriculture.

Jana has been pressing Agrium to spin off its wholesale fertilizer arm from its farm-supply outlets. Rosenstein projected that if Agrium sold off its fertilizer unit, Agrium’s share price would increase $50.

Agrium is not interested in splitting the company up and it has shared its disagreement with Jana on this matter.

On Monday, Agrium issued a statement in response to Jana’s latest move. Agrium President and CEO Mike Wilson said:

“The facts are straightforward. Agrium remains committed to its highly successful integrated strategy.  JANA has been trying for over six months to obtain support for its idea that Agrium should spin off or sell its retail operations. Agrium’s shareholders have overwhelmingly rejected JANA’s ideas. As a result, we believe JANA’s attempt to run its own slate for Agrium’s board is almost certain to fail.”

“The fundamental question is whether or not a break-up of Agrium would create compelling, sustainable value for its shareholders. As we have made clear, the breakup of Agrium will destroy value rather than create it.”

 “Before reaching the unanimous conclusion to reject a spin off of retail, the independent directors of the board spent two months evaluating all of JANA’s ideas with our independent financial advisor. Since that time, our management team has devoted an extraordinary amount of time meeting with our analysts and our shareholders, including JANA, to review our integrated strategy and discuss JANA’s ideas.”

“We listen to our shareholders and the overwhelming majority continue to support the company’s position. Over the past year, Agrium has implemented three dividend increases, a Cdn$900-million share buyback and supplemented our retail disclosure. Other than JANA, shareholders are not asking Agrium to consider a Retail spin-off or to evaluate any other structural changes. Shareholders have told us that they invest in Agrium in part because they want exposure to retail and the advantages of our integrated model.”