(Updates with railroad response in second paragraph.)
Oct. 28 (Bloomberg) -- Pershing Square Capital Management LP, the activist hedge fund run by Bill Ackman, has acquired the equivalent of a 12.2 percent stake in Canadian Pacific Railway Ltd.
Pershing, whose stake in the carrier includes call options, may engage in talks with management, according to a U.S. regulatory filing today. Ed Greenberg, a spokesman for Calgary- based Canadian Pacific, said he hadn’t seen the filing and couldn’t immediately comment.
Ackman invests in companies he deems undervalued and then urges changes he says will increase shareholder returns. In the past year, he has bought stakes greater than 10 percent in Fortune Brands Inc., the maker of Jim Beam bourbon now known as Beam Inc. after a spinoff, and J.C. Penney Co., the third- largest department store chain in the U.S.
Canadian Pacific is the country’s second-biggest railroad, behind Canadian National Railway Co. Its market value is C$11.2 billion ($11.3 billion), according to data compiled by Bloomberg.
Canadian Pacific gained 6.9 percent to $69.01 in after- hours U.S. trading at 6:04 p.m. New York time. The shares advanced 4.3 percent to $64.57 at the close, including a jump of about 2 percent in the final three minutes as Pershing bought the stock.
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