On Jan. 4, Mr. Ackman wrote to Canadian Pacific’s 70-year-old chairman to say that peace could be had if Mr. Harrison were made chief executive and two of Mr. Ackman’s representatives were appointed to the board, but there would be “thermonuclear war” if his demands were rebuffed. Clearly, Mr. Ackman was not buying into the polite Canadian investing culture.
In hindsight, Canadian Pacific’s failure to negotiate more meaningfully with Mr. Ackman was probably a mistake. It not only goes against the current trend of companies’ engaging with activists, but with an investment of more than $1 billion, Pershing Square was not going to retreat quietly.
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Sure enough, less than three weeks later, Pershing Square announced that it would nominate five directors to the 15-member Canadian Pacific board, including Mr. Ackman, at the company’s annual shareholder meeting on May 17.