CP’s former saviour quits board
Move follows Pershing Square’s selloff of its full stake in railroad
Bill Ackman, the American activist investor who sparked a turnaround of Canadian Pacific Railway, has resigned from the company’s board of directors, a month after his Pershing Square Capital Management sold its entire stake in Canada’s second-largest railroad.
Ackman’s departure is effective immediately, Calgary-based Canadian Pacific said Tuesday. Former Canadian Imperial Bank of Commerce executive Jill Denham and former Canadian Pacific chief financial officer William Fatt have joined the railroad’s board.
At Canadian Pacific, Ackman successfully led a proxy fight to oust then-chief executive Fred Green, who was eventually replaced by retired Canadian National Railway CEO Hunter Harrison.
Harrison has turned Canadian Pacific from the least-efficient North American railroad into one of the best performing.
“Over the past four years we have built a better CP and that model remains in place to continue to deliver not just for shareholders, but for customers and employees,” Harrison said in a news release.
Ackman said last month that he intended to continue to serve on the railroad’s board until the next annual meeting.
He became a director in 2012, and served most recently as member of the finance and corporate governance and nominating committees.
“Bill has been instrumental in CP’s turnaround and his leadership will be missed at the board level,” Canadian Pacific chairman Andrew Reardon said in a statement. “His experience, energy, commitment and knowledge served the board well over the past four years and positions CP well for the future.”
Pershing Square Capital Management L.P., the hedge fund controlled by Ackman, said last month it was selling its entire 9.8-million shares, worth about $1.9 billion. The New York-based firm said it would use proceeds to fund one or more new investments, without being more specific.
“I am proud to have served alongside so many passionate and diligent board members, and to have worked with management and the entire CP team on one of the most successful turnarounds in North American corporate history,” Ackman said in a statement. “I am confident that with CP’s superb management and strong governance, it will extend its remarkable track record into the future.”
In separate news, Pershing Square disclosed in a regulatory filing Tuesday that it has a 9.9 per cent stake in Chipotle Mexican Grill and that it planned to engage in discussions with the company.
The Denver-based company struggled after suffering an E. coli outbreak and norovirus cases last year.
Pershing said it believes Chipotle shares are undervalued and plans to discuss ways to improve the company’s operations, cost structure, management and strategy, according to the filing. The announcement sent the shares up as much as 8.7 per cent to $450 in late trading. In addition to Canadian Pacific, Ackman has sought changes at companies such as Valeant Pharmaceuticals International Inc. and J.C. Penney Co.
He also made a $1-billion bet against Herbalife Ltd., the nutrition company he alleges is a pyramid scheme.