Exclusive: Polled CP Rail shareholders favor Pershing, some unsure
By Nicole Mordant and Susan Taylor
VANCOUVER/TORONTO (Reuters) - A month before a showdown over who should run Canada's second biggest railroad, more than half of the shareholders in a Reuters survey favor a dissident shareholder's slate of candidates over Canadian Pacific Railway Ltd's existing board.
Several respondents said that even the strong first-quarter results that CP Rail expects to report on Friday won't persuade them to stick with CP's incumbent directors and Chief Executive Fred Green.
And they said Hunter Harrison - the well-known former CEO of Canadian National Railway Co, who is dissident shareholder Pershing Square Capital Management's pick to head CP - has more of what it takes to transform North America's worst-in-class railway into a potent operator than does Green.
"A relentless pursuit of efficiency and improvement is seemingly lacking in the current operation. Sometimes it just comes down to drive and execution, which I think Hunter has," said Jim Huang, president and portfolio manager at Toronto-based T.I.P. Wealth Manager Inc, which owns a small number of CP shares.
New York-based hedge fund Pershing is CP's biggest shareholder. It is pushing hard to shake up the company, starting with installing Harrison at the top, and has put forward a slate of seven new director nominees to be voted on by shareholders at the railroad's annual meeting in Calgary on May 17.
In the Reuters survey, conducted between April 11 and 17, five shareholders, including three large holders, said they would back Pershing. One shareholder said his firm would support CP, and three were undecided. Reuters attempted to survey more than 50 shareholders and nine responded.
Those who said that they are in the Pershing camp account for about 5 percent of CP's shares. If Pershing's own 14.1 percent stake is added, then almost one-fifth of the railroad's shareholders seem sure to back the fund's plan for change.
Last month, a poll by consulting firm Brendan Wood International of about a third of CP shareholders found that 91 percent of them want a management change. Continued...