Ontario Teachers to back Ackman in CP Rail vote
(Reuters) - Ontario Teachers' Pension Fund, a large Canadian Pacific Railway shareholder, will vote for William Ackman's slate of directors instead of the incumbent board, strengthening the activist investor's hand ahead of next week's proxy showdown.
Teachers said on Monday it would not vote for CP's slate of proposed directors because the company's performance has lagged its peers during Fred Green's tenure as chief executive.
In a statement posted on its website, Teachers said a recent set of strong CP results had failed to convince it that CP was outperforming its peers and it believed "there is more risk" in maintaining the status quo.
"After reviewing the proxy materials for both management and the dissident, Teachers' is voting the dissident proxy, requiring an 'abstain' vote on the management proxy," the pension fund manager, one of Canada's largest, said.
A proxy battle between Canada's second biggest railroad and Pershing Square Capital Management, a hedge fund that Ackman runs, will be decided at CP's annual meeting in Calgary, Alberta on May 17. Pershing is CP's biggest shareholder with a 14.1 percent stake.
"We urge the Ontario Teachers' Pension Plan to reconsider its decision and to support the CP board nominees and the continued creation of value through the aggressive and successful execution of CP's multi-year plan," CP said in a statement.
The railroad said it would continue soliciting shareholders to vote in favor of its board nominees up until voting closes next Thursday.
Teachers owns approximately 2.46 million shares in CP, or a stake of 1.33 percent as of March 31, according to Thomson One data. That makes it CP's 16th largest shareholder.
Teachers' support for Pershing is in line with recent polls that indicate that most institutional shareholders favor the Pershing board nominees. Continued...