Consolidation in the rail industry could be back on the front burner after battle-scarred veteran Hunter Harrison stepped down from the head of Canadian Pacific Railway Ltd., reportedly to work his magic at another underperforming railroad.
CSX Corp. may install Hunter Harrison as chief executive officer as early as next week as the railroad and an activist shareholder move closer to ending an impasse over Harrison’s compensation, people familiar with the matter said.
CSX Corp. appointed Hunter Harrison as chief executive officer effective immediately, entrusting the industry veteran with the task of turning around North America’s least efficient railroad. He’ll stick around as long as shareholders are willing to meet his pay demands.
Canadian Pacific Railway Ltd. may be losing its legendary CEO to a competitor, but investors shrugged off the development Thursday, sending shares up as much as 4.2 per cent in morning trading.
Several analysts lowered their price targets on CP’s stock Thursday, citing the company’s lower-than-expected fourth-quarter profit and 2017 guidance that came in below analyst expectations.
Canadian Pacific Railway on Tuesday revised its bid to buy U.S. railroad operator Norfolk Southern Corp, less than a week after its prior $28.4 billion proposal was rejected — and the new offer was promptly rejected again.
Calgary-based CP said it was now offering $32.86 in cash and 0.451 of a share in a new holding company that would own both Norfolk Southern and Canadian Pacific. To alleviate regulatory concerns, CP said it was prepared to close the transaction using a voting trust.
After hosting a lunch with Hunter Harrison and activist investor Paul Hilal, Wolfe Research says there’s a 90 per cent chance that Harrison will be installed as chief executive of CSX Corp. within five months.
As a result, analyst Scott Group hiked his year-end price target on the stock to $57 from $47 and reiterated that CSX is his favourite rail investment.
When activist investor Bill Ackman first approached Canadian Pacific Railway Ltd.’s management about making major changes to the underperforming railway, including hiring a chief executive who had just retired from its closest rival, they were understandably defensive.
In press release on Feb. 6, 2012, responding to a town hall meeting Ackman’s hedge fund had just held for CP shareholders, the company accused Ackman of having no plan, just criticism.
Canadian Pacific Railway Ltd., the second-biggest railroad in Canada, is exploring a takeover of U.S. carrier Norfolk Southern Corp. in a fresh attempt to consolidate the North American industry, according to people familiar with the matter.
Canadian Pacific Railway Ltd. unveiled details of its dramatically reorganized structure Wednesday, centralizing the railroad’s planning under new chief executive Hunter Harrison but also aiming to empower frontline workers to react more quickly to operational challenges and improve relations with its customers.
The unions representing CP’s workers, however, said they were still in the dark about where 4,500 job cuts, to come by 2016 under the plan, will fall.