Bill Ackman’s Pershing Square Capital Management L.P., plans to sell up to 29 percent of its stake in Canadian Pacific Railway Limited (NYSE:CP) (TSE:CP).
New York hedge fund manager Bill Ackman owned Pershing Square in its regulatory filing Monday, reported it plans to sell up to 7 million of its shares in the Calgary, Alberta company, as a result of its strong performance in the stock market.
Bill Ackman’s Stake In Canadian Pacific:
The hedge fund first started investing in Canadian Pacific Railway Limited (NYSE:CP) (TSE:CP) shares in September 2011. Since then the stock price tripled making the hedge fund’s stake in Canadian Pacific Railway Limited (NYSE:CP) (TSE:CP) grow to roughly 26 percent of the combined assets held by the hedge fund.
Such increased concentration and portfolio management considerations have driven the hedge fund to trim its exposure in the Calgary, Alberta company. However the hedge fund in its regulatory filing disclosed that even after the proposed sales, the fund is expected to remain as the largest shareholder in Canadian Pacific Railway Limited (NYSE:CP) (TSE:CP). Besides, CP is expected to be one of the large investments of the hedge fund.
Pershing Square currently holds about 24.2 million CP shares, making it the largest shareholder with about 14 percent.
Canadian Pacific Team’s Strong Performance:
Thanking the Canadian Pacific Railway Limited (NYSE:CP) (TSE:CP) team’s strong performance during the past one year, the hedge fund clarified that the proposed sale doesn’t reflect any disappointment of the railway operator’s Chief Executive Hunter Harrison.
Bill Ackman’s Fund Plans To Limit The Sale In Canadian Pacific:
Bill Ackman’s hedge fund in its regulatory filing indicated that it plans to limit the sale in Canadian Pacific Railway Limited (NYSE:CP) (TSE:CP) to unsolicited brokers’ transactions on the New York Stock Exchange and Toronto Stock Exchange, for amount not exceeding 10 percent of the combined volumes at the two stock exchanges for the railway operator’s common shares on any trading day.
Pershing Square disclosed that the proposed sale would begin on or after June 10, 2013 and would get completed during the next six to twelve months. Besides the hedge fund’s representatives, Bill Ackman and Paul Hilal, will continue to serve on the railway operator’s board. These two directors were appointed in May 2012 after winning a proxy contest.