Bloomberg News

Canadian Pacific Cites Holder Support Amid Ackman Demands

January 23, 2012

(Updates with closing share price in final paragraph.)

Jan. 20 (Bloomberg) -- Canadian Pacific Railway Ltd., the railroad under pressure from investor William Ackman to hire a new chief executive officer, said some customers and shareholders support its current CEO, Fred Green.

“Our shareholders recognize the operational and financial changes we are making to enhance value,” Green said in a letter to employees posted on the company’s website today. “We have heard support for our plan from shareholders.”

Ackman, Canadian Pacific’s largest investor, disclosed his stake in the Calgary-based company in October and has put naming Hunter Harrison as CEO at the center of his turnaround plan for the railroad. Canadian Pacific Chairman John Cleghorn rebuffed Ackman’s push to replace Green with Harrison in a letter released Jan. 9.

In today’s letter, Green also cited support for his leadership from some of Canadian Pacific’s largest customers, including Teck Resources Ltd. and Mosaic Co.

“Fred Green understands that to grow the economy, especially in Western Canada, we need to work together to get the most out of the rail network,” Teck CEO Don Lindsay said in the letter. “We are pleased with his leadership and support of the team in making our joint growth targets achievable.”

Ackman, the founder of New York-based Pershing Square Capital Management LP, invests in companies he deems undervalued and seeks changes to improve shareholder returns.

Pershing didn’t respond to a phone call seeking comment.

Canadian Pacific fell 1.4 percent to C$71.56 at the close in Toronto.

--Editors: James Callan, Niamh Ring

To contact the reporter on this story: Natalie Doss in New York at ndoss@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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