In a sweeping move, Canadian Pacific early Thursday announced not only the departure of President and CEO Fred Green—a move widely expected—but also the declaration of six existing directors not to stand for re-election. Green’s departure was effective “immediately”; he also will not stand for re-election as a director.
As this is written, much of the railroad world awaits the Thursday, May 17, vote by Canadian Pacific share owners. Early book betting says that insurgent hedge fund Pershing Square Capital Management and its head William Ackman will take a majority if not all of the seven contested board seats.
Reaction to the fight for control of Canadian Pacific seems to depend on whether the person reacting is a railfan or an investor.
The general committees of the Teamsters Canada Rail Conference (TCRC), representing the conductors, trainmen, yardmen, locomotive engineers and rail traffic controllers employed by Canadian Pacific Railway, announced Thursday they have been authorized by their membership to launch a strike against CP as early as late May.
Following Canadian Pacific’s favorable first-quarter 2012 earnings report last week, Pershing Square Capital Management stepped up its attack on CP President and CEO Fred Green (pictured) and his management team with a strongly worded letter to shareholders that some industry observers are calling an obviously self-serving and misleading manipulation of numbers.
Canadian Pacific Railway early Friday announced stellar first-quarter net income of C$142 million, up C$108 million, or 318%, from the first quarter of 2011. Diluted earnings per share did nearly as well, at 82 Canadian cents per share for the first quarter, up 62 Canadian cents or 310% from a year ago.
In his proxy fight for control of Canadian Pacific, Pershing Square Capital Management hedge fund chief Bill Ackerman contends that the railroad’s management has failed to seize opportunities to improve its performance.
The stage has been set for Canadian Pacific’s annual shareholders meeting on May 17, where hedge fund Pershing Square Capital Management will attempt a takeover of CP and replace the railroad’s president, Fred Green, and board of directors with its own candidates.
Canadian Pacific Railway Thursday reported fourth-quarter net income of C$221 million and diluted earnings per share of C$1.30, including 22 Canadian cents per share income tax benefit. For the full year, the company reported net income of C$570 million, down from last year, and diluted earnings per share of C$3.34.
Canadian National and Canadian Pacific reached separate 10-year agreements with Canpotex Ltd. to transport potash volumes that Canpotex ships to export markets. Under CP’s agreement, CP will be Canpotex’s principal Canadian railway, transporting a large majority of potash shipments to Canpotex’s main terminal in Vancouver, British Columbia. In addition, in conjunction with Union Pacific, CP will transport significant Canpotex potash shipments to Portland, Ore.
