Canada Pension Plan fund backs Bill Ackman in CP Rail proxy fight

By Takeover Analyst:In previous articles, I have expressed my bullish outlook on the rail industry. In this one, I argued, frankly, that "railroad stocks are heading skyward". Satiating my interest in railroads with my background in proxy fights, it is interesting to watch the battle going on at Canadian Pacific (CP).

Remember when U.S. hedge fund manager Bill Ackman railed against the cozy corporate culture of the Canadian establishment during his bruising proxy battle to unseat the blue-chip board at Canadian Pacific Ltd. last year? Recall his lament of how difficult it was to recruit candidates to join his activist campaign because folks were unwilling to “stick their necks out” when his New York-based firm Pershing Square Capital Management LP launched an assault to force the ouster of Fred Green, chief executive of one of this country’s most venerable and underperforming companies.

By Streetwise Blog: By Tim Kildaze Here’s a brainteaser for you: Because Canadian Pacific Railway Ltd. (CP) has underperformed its rivals for so long, did shareholders really need an activist to show them the light?

Canadian Pacific Railway is planning to relocate much of its head office from downtown Calgary, union officials and a source close to the company said, under a restructuring plan that its new chief executive will detail to investors in early December. Chief Executive Hunter Harrison told U.S. union leaders and a Canadian union president that Canada’s second-biggest railroad will move employees out of its glass-towered headquarters as part of an ambitious cost-cutting plan.

Activist investor Bill Ackman has received another endorsement for his push for management change at Canadian Pacific Railway Ltd.

Canadian Pacific Railway Ltd.’s goals for improving its operations are “unachievable” and a double-digit correction may be lying in the wings in the coming months, one analyst warned investors Thursday. Walter Spracklin, an analyst at RBC Capital Markets, splashed cold water on CP’s red-hot stock in the lead up to its investor meeting next week, where the company’s new management under recently appointed chief executive, Hunter Harrison, is expected to unveil its turnaround plan.

Hedge-fund manager Bill Ackman has been racking up shareholder support in his effort to install new board members and replace the management team at Canadian Pacific Railway.

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