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U.S. activist investor Ackman leaves CP board

Hedge fund chief sets gaze on Chipotle Mexican Grill

(Dave Bedard photo)

Bill Ackman, the U.S. activist investor who usurped the leadership of Canadian Pacific Railway in 2012, is leaving the Calgary company’s board after his hedge fund sold off its remaining stake last month.

Ackman, who heads New York-based Pershing Square Capital Management, joined CP’s board in 2012 and served on its finance and corporate governance and nominating committees. He had spearheaded a successful effort to install ex-Canadian National Railway (CN) CEO Hunter Harrison at CP’s helm and bring in new board members.

Ackman “saw an opportunity at CP, worked hard to bring me in to the fold, and delivered for shareholders and the board,” Harrison said in a CP release Tuesday. “Over the last 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.”

Market watchers have seen CP’s reversal of fortunes since Pershing Square’s initial investment in 2011 as a major coup for Ackman. CP on Tuesday described itself as “the worst-performing Class 1 railroad in North America” prior to Ackman’s involvement.

Since then, the company said, it has “generated more than $14 billion in shareholder value and its share price has outperformed the S+P/TSX Composite by 120 per cent through the end of 2015.”

The company on Tuesday named Jill Denham and William Fatt as new board members. Denham chairs the boards of Munich Reinsurance Canada and human resources firm Morneau Sheppell, and is a board member at National Bank of Canada and Kinaxis Inc.

Fatt, a former chief financial officer for CP’s parent firm Canadian Pacific Ltd., is also a board member with the Jim Pattison Group and the Bank of Nova Scotia.

With US$1.5 billion freed up from the sale of its CP stake, Pershing Square has made its first addition to its portfolio in nearly a year, announcing a 9.9 per cent stake in beleaguered Denver-based restaurant chain Chipotle Mexican Grill.

The once-high-flying Chipotle chain, which was tied to E. coli, salmonella and norovirus outbreaks last year and has seen its share price drop 13 per cent since January, saw a jump of over five per cent on Tuesday shortly after Ackman’s involvement was announced.

Ackman said Tuesday the company’s shares, which closed at US$438.45 on Wednesday, up almost six per cent from the previous day, were undervalued and he would be speaking with management. — Network/Reuters

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