We have long been covering the ongoing proxy war between Pershing Square CEO, Bill Ackman, and Candian Pacific Railroad (NYSE:CP). Ackman owns 14% of the company and wants to make changes to the board. The company and Ackman have exchanged a series of volleys on the topic of management.
Bill Ackman specifically wants Hunter Harrison, former CEO of Canadian National Railway (NYSE:CNI), which is a major competitor of Canadian Pacific to replace the CEO of CP, Fred Green. Harrison was credited with successfully turning around Candian National Railway before he finally retired in 2009.
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CP has again fired back today with a lengthy letter defending the company’s CEO and his achievements at the helm.
Canadian Pacific’s Chairman John Cleghorn stated the following in the letter:
“The board believes that Pershing Square’s demand that the company replace its CEO, Fred Green, with Hunter Harrison would put at severe risk the significant forward momentum the company is making on the multi-year plan,” the letter says. “Given that Pershing Square has presented no credible, detailed plan, the approach advocated by Pershing Square and its nominees, none of whom has any operational experience with Class I railroads risking moving CP in the opposite direction. It is exactly the wrong thing to do at exactly the wrong time.”
Canadian Pacific Railway Ltd. specifically touted its customer relationships in the letter. The letter quoted Don Lindsay, President and Chief Executive Officer, Teck stating:
“As CP’s largest customer, we’ve been pleased with their dedication to ensuring that we get the rail service we need and their deep understanding of our current and long-term needs. That is why we recently increased the volume of business we allocate to CP and, today, both companies are seeing growing economic returns. Fred Green understands that to grow the economy, especially in Western Canada, we need to work together to get the most out of the rail network. We are pleased with his leadership and support of the team in making our joint growth targets achievable.”
Ackman plans to make more of a push in his efforts at the Pershing Square annual meeting in May.
The full press release from CP can be found here.