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This morning in Toronto, Pershing Square Capital Management L.P. held a meeting with Canadian Pacific shareholders to tout former CN President and Chief Executive Officer E. Hunter Harrison as the company’s candidate to replace CP President and CEO Fred Green, and elicit support for Pershing Square’s five CP board nominees. Late last year, Pershing Square acquired a 14.2 percent stake in CP, and since then has been pushing for a top management change and new board members at the Class I to hasten financial and operational improvements.
An article posted on the Toronto Star’s web site shares some of the comments Pershing Square leader William Ackman and Harrison made during the meeting. Follow this link to read the article.
Later on Monday, CP officials released the following statement in response to Pershing Square's meeting:
"Pershing Square continues to offer no plan or clear timetable to improve CP's operations, or even any concrete suggestions. As part of its evaluation of the demand made by Pershing Square in November 2011 that CP replace its Chief Executive Officer with Hunter Harrison, the board of directors took into account the fact that CP's multi-year plan is well underway and producing results, together with Pershing Square's statement that Mr. Harrison has no detailed plan to improve CP's operating performance. Based on the presentation made at today's town hall meeting and the spoken remarks made by Bill Ackman, Chief Executive Officer of Pershing Square, Mr. Harrison and Pershing Square's director nominees, it appears that Pershing Square still has no plan or clear timetable to improve CP's operations.
"In Pershing Square's town hall presentation, Pershing Square made a number of assertions and characterizations supported by hypothetical mathematical examples of the effects of speculated improvements on operating metrics similar to those contained in Pershing Square's Nov. 2, 2011, presentation to the company. Pershing Square has no plan and has provided no specific actions to support its hypothetical math. Pershing Square continues to plan a proxy contest based on a call to change management which the CP board believes would cause serious disruption to CP's business and the multi-year plan, which is improving CP's operations.
"CP's multi-year plan has been verified and endorsed by the Board to drive volume growth, increase productivity, expand the network and control costs. CP's board, which was recently strengthened with further railroad expertise by the appointment of Tony Ingram and Ed Harris, will continue to hold CP's President and Chief Executive Officer, Fred Green, and CP's senior management fully accountable for delivering on the multi-year plan.CP is confident that by aggressively executing against this plan, the company can achieve an operating ratio of 70 to 72 percent for 2014 and CP will not stop there — as the company achieves its goals, CP will set new targets.”