The hedge fund manager Bill Ackman said Monday that he would wage a proxy battle to replace both the directors and the chief executive of the Canadian Pacific Railway after it rejected his plan to bring in a former rival to run the company.
Mr. Ackman, whose firm Pershing Square Capital Management is the largest shareholder in the railway, raised the specter of a proxy fight in a interview shortly after John E. Cleghorn, the chairman of Canadian Pacific, released an open letter to shareholders supporting Fred Green, the current chief executive, and his long-term plans for the company.
Last week, both sides publicly exchanged letters offering differing views of Canadian Pacific’s performance. Mr. Ackman criticized Mr. Green for allowing the railway’s expenses to remain relatively high in comparison with its operating revenues, a common measure financial performance measure for railroads.
Yarra Square Partners returned 19.5% net in 2020, outperforming its benchmark, the S&P 500, which returned 18.4% throughout the year. According to a copy of the firm's fourth-quarter and full-year letter to investors, which ValueWalk has been able to review, 2020 was a year of two halves for the investment manager. Q1 2021 hedge fund Read More
To change that situation, Mr. Ackman is proposing to bring in E. Hunter Harrison, the former head of the Canadian National Railway to replace Mr. Green. Under Mr. Harrison, Canadian National became one of the most efficient large railroads in North America.
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