January 30, 2017 / 3:04 AM / a year ago

CSX, outgoing Canadian Pacific CEO in settlement talks - WSJ

Jan 29 (Reuters) - U.S. railroad operator CSX Corp is discussing a settlement with Hunter Harrison, the outgoing chief executive of Canadian Pacific Railway Ltd, and activist investor Paul Hilal that could make Harrison CSX’s CEO, the Wall Street Journal reported.

The talks come less than two weeks after Harrison partnered with Hilal’s new fund, Mantle Ridge LP.

The parties are discussing Mantle Ridge's request for more than three CSX board seats, but CSX is said to be unwilling to hand over that many seats, WSJ reported, citing people familiar with the matter. on.wsj.com/2khOUIX

The fund is acquiring a large stake in CSX with the hope of installing Harrison to improve the company’s performance, people familiar with the matter said last week.

CSX Corp could not be immediately reached for comment.

Any push to quickly replace CSX CEO, Michael Ward, who plans to retire in 2019, would need to occur before the company’s Feb. 10 director nomination deadline. If the two sides fail to strike a deal, Hilal may be forced to nominate a slate of directors who can put Harrison in the CEO seat.

Harrison’s track record of cutting operating costs and driving up profitability at the helm of CP and at Canadian National Railway Co has helped CSX shares surge 30 percent since news of the Mantle Ridge plan surfaced.

Mantle Ridge has raised more than $1 billion for its CSX stake, Reuters reported earlier this month. (Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Gopakumar Warrier)

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