Ackman sees little scope for compromise with CP Rail
By Euan Rocha
TORONTO (Reuters) - Canadian Pacific Railway Ltd indicated on Wednesday it is willing to negotiate a compromise with activist investor William Ackman, but Ackman said the chances of a deal ahead of a showdown shareholder vote later this month were "almost zero."
The main obstacle to a compromise appears to be a battle over who should be at the helm of CP, Canada's No. 2 railroad.
Ackman's hedge fund, Pershing Square Capital Management, wants CP Chief Executive Fred Green to be replaced by Hunter Harrison, the former head of Canadian National Railway.
CP has so far stood by Green, but at least one report now hints that it now may be willing to talk about replacing him. CP, however, is refusing to even consider Harrison for the job.
Pershing, CP's top shareholder with a 14.1 percent stake, contends that CP has been mismanaged, and it has named a slate of seven candidates for election to CP's board of directors. Pershing's nominees are competing directly against CP's own slate.
Shareholders are set to vote on the rival slates at the company's annual meeting on May 17 and some recent shareholder polls indicate that most institutional shareholders favor the Pershing Square nominees.
"CP has heard many of its shareholders who have indicated they would prefer to see a reasonable compromise worked out before the May 17 annual meeting," said CP spokesman Ed Greenberg.
"Mr. Ackman's recent public statements indicate he is opposed to a compromise. If that changes, we would be pleased to have discussions towards a constructive resolution that would be in the best interests of CP and all its shareholders." Continued...