Ackman’s Pershing Square Acquires 12.2% Canadian Pacific Stake

[dcollon]

http://www.bloomberg.com/news/2011-10-28/ackman-s-pershing-acquires-12-2-stake-in-canadian-pacific-may-seek-talks.html

 

[Buckeye]

This seems like an interesting pick.  As a (biased) owner of CNI it looks like the better company, of the two, by far.  Better margins, end-to-end network from Atlantic to Pacific, rail to Gulf of Mexico, rail into upper provinces and priced far lower on an earnings basis.  Maybe with Gates being a large holder he wanted to stay away from CNI.   

 

Also, for you Canadians, wasn't there a stipulation when the two rails went public that there was a limit on the percentage of ownership one could have in either of them? I often that if not for this that Buffett's Burlington could make a bid to create the mother of all rail distribution system. 

 

Thoughts? Comments?

[Liberty]

I wonder what kinds of changes he has in mind for the company, assuming that he'll keep to his MO.

[augustabound]

I wonder what kinds of changes he has in mind for the company, assuming that he'll keep to his MO.

 

I was wondering the same thing.  A rail seems like an odd choice for an activist investor, assuming like you allude to, he stays with him MO.

[ourkid8]

CN is a very large position in my portfolio and I know that CN is goverened by the CN Commercialization Act which has 2 key provisions, 1. No individual shareholder can own more than 15% of CN 2. CN's headquarters must remain in Montreal thus maintaining CN as a "Canadian corporation".

 

I am not sure if there are any acts around CP Rail, is there any shareholders on the board that care to elaborate?  With the recent backlash around BHP trying to acquire POT, I highly doubt the government will allow CP Rail to be acquired.  (The most likely acquirer is Burlington Northern)  CP has been extremely badly managed and requires new management but this has played into the benefit of CN Rail shareholders!  :) 

 

Thanks,

 

S

 

This seems like an interesting pick.  As a (biased) owner of CNI it looks like the better company, of the two, by far.  Better margins, end-to-end network from Atlantic to Pacific, rail to Gulf of Mexico, rail into upper provinces and priced far lower on an earnings basis.  Maybe with Gates being a large holder he wanted to stay away from CNI.   

 

Also, for you Canadians, wasn't there a stipulation when the two rails went public that there was a limit on the percentage of ownership one could have in either of them? I often that if not for this that Buffett's Burlington could make a bid to create the mother of all rail distribution system. 

 

Thoughts? Comments?

[augustabound]

 

He's moving quickly.

 

It is almost unheard of for shareholder activists to gain such quick access to senior officials of a major company. That CP would engage in discussions so soon with Mr. Ackman reflects his unique and growing influence in the capital markets.

 

Pershing’s regulatory filing says it can pursue a number of options with CP, including purchasing additional shares or selling some or all of its current holdings.