CP ratchets up defence with testimonials

Canadian Pacific Railway Ltd, ratcheting up its defence in a proxy battle with its biggest shareholder, said on Wednesday its “strong” customer relationships are paying off and posted testimonials from satisfied companies. A number of customers, including miner Teck Resources and potash producer Mosaic, said they were pleased with the service from Canada’s No. 2 railroad and some went further to back its chief executive, Fred Green.

“We are pleased with his leadership and support of the team in making our joint growth targets achievable,” said Don Lindsay, the president and CEO of Teck, a major producer of coal, copper and zinc and CP’S biggest customer.

The testimonials were contained in a letter to shareholders signed by CP chairman John Cleghorn.

Pershing Square Capital Management, which owns 14.2 per cent of CP, wants to oust Green, blaming him for the railroad’s sluggish performance.

“This is the same thing that they have been saying since Day 1. . . . They are just trying to make their case to shareholders,” Edwardjones analyst Brian Yarbrough said of the letter.

Replacing Green with Pershing’s candidate for CEO, Hunter Harrison, the former CEO of rival Canadian National Railway, would put the progress CP is making on its multiyear plan at “severe risk,” Cleghorn said in the letter.

CP again slammed Pershing Square for not presenting a detailed plan for the railroad. Shareholders are due to vote on May 17 on a slate of six directors that Pershing has nominated for CP’S board.