Bill Ackman is continuing on his crusade to change the way Canadian Pacific Railway Ltd. (TSE:CP) does its business by offering up a new nomination for director in the Group. Ackman has recruited Steven Tobias, a former executive at Norfolk Soutern Corp., to run as a director in the company. The hedge fund manager has been striving for some time to see the railway giant change its board membership. Pershing Square Capital Management, the investment firm at which Ackman is CEO, acquired about 14% in the company demonstrating the funds belief that the company is undervalued.
Mr. Tobias spent his entire career at Norfolk running a railway that operates down the east coast of the United States. He earned a reputation as a strong decisive leader there and wventually retired after 40 years at the firm. His experience in the industry will be an asset to Ackman’s attempts. The directors previously nominated were previously condemned for lack of experience in the industry. Tobias has that in spades and it will be no secret come the proceeding in May. The added weight could be enough for Ackman to take greater control at the railway company.
Ackman announced previously that he would engage in a proxy fight to have the current CEO of CP removed and replaced with his own candidate. The candidate Ackman has chosen is the former CEO of Canadian National Railroad Hunter Harrison. The battle has resulted in a series of bitter exchanges between Ackman and the current CEO Fred Green which we covered previously. The company has apparently invited the activist to join their board multiple times though he says his acceptance would require him to stop his attempts to change the company, something he is unwilling to do.
Mr. Tobias is one of seven alternative directors Ackman has so far recruited to try to get a place on the board. The decision will be made at the next shareholders meeting which will take place on May 17th. There will be a battle between Ackman’s hopefuls and the incumbent 15 directors of the company. Ackman may still be interested in acquiring new nominations fo the positions before the meeting that decides the eventual directors. Whether or not the attempt will pay off is certainly a matter of great speculation but Ackman’s influence is powerful and his fund’s stake in the company shows his belief that it can greatly increase in value.