Pershing's Ackman rules out compromise on CP Rail

Tue May 8, 2012 7:44pm EDT
 
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By Allison Martell and Euan Rocha

TORONTO (Reuters) - Activist investor William Ackman shut the door on Tuesday to a late compromise with Canadian Pacific Railway Ltd, setting up Canada's second-largest railroad for an embarrassing defeat in a proxy vote next week.

Holders of about a third of CP shares have already voted, Ackman said, with more than 95 percent of those shares cast in favor of a slate of directors nominated by his Pershing Square Capital Management. The U.S. hedge fund is CP's largest shareholder, with 14.1 percent.

With shareholder polls indicating that its slate would likely go down in defeat, CP indicated last week it was willing to negotiate a compromise with Pershing ahead of the vote at its annual shareholder meeting next Thursday, May 17, in Calgary.

But Ackman insisted on Tuesday that a shareholder vote is the best way to end the struggle over the shape of the CP board. "I think it actually needs to go to a vote," he said at the Bloomberg Canada Economic Summit in Toronto.

Asked if he would accept any type of compromise from CP at this stage, Ackman said: "No. The shareholders we talk to want the vote and the message delivered."

Ackman's aim is to replace CP Chief Executive Fred Green with Hunter Harrison, the hard-driving former CEO of Canadian National Railway. Pershing launched its slate of dissident directors - there are now seven, including Ackman - after the existing board backed Green.

Ackman said shareholders should also have a chance to decide which of CP's 15 current directors should stay on the board.

CP said in an emailed statement that "a vote for seven Pershing Square nominees is a vote for risk and disruption."   Continued...

 
Activist shareholder William Ackman of Pershing Square Capital Management speaks during the Canadian Pacific Railway Ltd. shareholders and analysts meeting in Toronto February 6, 2012. REUTERS/Mike Cassese