Bill Ackman is no stranger to proxy fights. The Pershing Square manager went to the mattresses against McDonalds (MCD) in 2007, Target in 2009 and JC Penney (JCP) in 2010. The latter two even employed Goldman Sachs (GS) to help fend off the activist investor, leading Ackman to quip, that he’s “probably Goldman’s best customer, that isn’t actually a customer.” Ackman saw very clearly in his dealings with Sears (SHLD) when one shareholder – in the case of Sears, Eddie Lampert – controls a large stake in the company, other shareholders end up at that person’s mercy. As an activist investor, Ackman uses that technique to his advantage – explaining, “If we don’t like the direction of the company, management or risks there are things we can do as activist shareholders.”
Now, it seems Ackman may have to get in the ring once again. “The hedge fund manager William A. Ackman said Monday that he would wage a proxy battle to replace the directors and the chief executive of the Canadian Pacific Railway after it rejected his plan to bring in a former rival to run the company,” reports the New York Times. Ackman, whose Pershing Square is Canadian Pacific Railway’s largest shareholder, raised the possibility of a proxy fight after CP Chairman John Cleghorn released an open letter (read it here) expressing the CP Rail board’s support of current CEO Fred Green. Ackman is actively trying to bring CP Rail’s performance up to par and he thinks that Green is the main obstruction. Ackman wants to bring railroad legend Hunter Harrison on board instead. “We have a legendary C.E.O. with an incredible track record,” said Ackman. “Who better to bring an underperforming competitor up to snuff?”
Ackman’s retort is only the latest volley in a string of exchanges that began on January 3rd, when John Cleghorn filed a litter with the SEC (read it here) that accused Ackman of leaking information to the media regarding his support of Harrison. Ackman responded in kind with his own letter (read it here), in which he expressed his support for Harrison.