CP Rail nominates activist investor to board
By Allison Martell and Euan Rocha
(Reuters) - Canadian Pacific Railway Ltd (CP.TO: Quote) nominated activist investor William Ackman for election to its board of directors on Thursday, the latest twist in a drawn-out proxy battle with his Pershing Square Capital Management.
Canada's No.2 railway is locked in a proxy contest with the Ackman-controlled hedge fund, which wants to replace CP's chief executive, Fred Green, with former Canadian National Railway (CNR.TO: Quote) CEO Hunter Harrison. Ackman believes Harrison is better suited to improve CP's lackluster operating performance.
CP said it strongly disagreed with Ackman's demand that it replace Green, but said it remained open to having Ackman join its board.
The company offered Ackman a board seat last year, but the activist investor turned it down and nominated himself along with a five-member slate for election to the CP board.
On Thursday, CP said it was ready to offer Ackman himself a voice on the board, but insisted that Pershing Square's other nominees have no evident rail experience and add no other complementary industry experience.
It is rare for companies to nominate a proxy foe like Ackman to the board, said Brad Allen, a senior vice president at proxy solicitation firm, Laurel Hill Advisory Group, which is not involved in the conflict.
"They know he's going to get support," he said. "They've made it easy for shareholders to elect him to the CP board and obviously not elect anyone else, trying to capture the vote of institutional shareholders that like Ackman, but don't know if they really like everybody else."
CP's annual shareholder meeting will be held on May 17, in Calgary, Alberta. Continued...