Ackman and Harrison take aim at CP Rail
10:31 AM, E.T. | February 6, 2012Industrials
The battle for change at struggling railroad operator CP Rail (CP-T) made its public debut on Monday.
New York-based hedge fund Pershing Square Capital -- led by Bill Ackman – kicked off a proxy battle by giving shareholders a presentation at a Toronto Hotel. Ackman wants to install a new chief executive at CP, and believes former CN Rail CEO Hunter Harrison is the right man to lead the company and improve operating performance at CP Rail, which has significantly lagged behind its peers in recent years.
And Ackman’s confident that shareholders will back him. “We wouldn’t do this if we didn’t think it was a very high probability we would win,” he tells BNN. “We are carrying the torch for other shareholders.”
Ackman’s primary target is the CP Rail board, which he says has failed to turn the railroad’s performance around and has continually offered excuses for the company’s poor track record.
“It’s not a question of better, it’s a question of this is a board that over the past five years allowed the company to fail and to underperform,” he says.
Harrison helped CN Rail (CNR-T) transition from crown corporation to market leader after joining the company in 1998. He is confident that he will be able to exit retirement and quickly turn CP Rail around.
“I have some unique abilities for being an agent of change,” he says. “My job is for the CP shareholder to see this operation get turned around and headed in the right direction.”
Harrison doesn’t plan on staying at CP Rail for an extended period of time, saying this is not a “10 or 15 year proposition for me.”
Ackman and CP Rail have been in a public dispute since Ackman’s hedge fund took a 14.2-percent stake in the company in the fall.