TORONTO — Activist investor TCI Fund Management says it is building support among other shareholders for its effort to replace Canadian National’s CEO and board chairman in the wake of the regulatory setback for CN’s effort to purchase Kansas City Southern.
The Toronto Globe and Mail, in a paywalled article, reports TCI partner Ben Walker said the investment firm has been talking with other large investors and claimed many were similarly unhappy with CN’s management.
“I think there’s a lot of like-minded shareholders out there. We’ve spoken to them,” Walker told the Globe. He declined to name those shareholders.
TCI, CN’s second-largest shareholder, owns more than 5% of the company, with shares worth more than $4 billion. In May, it had sent CN management a letter opposing the effort to acquire KCS because of the regulatory risk, and said it would seek the ouster of CEO JJ Ruest and chairman Robert Pace if the effort failed.
After the Surface Transportation Board on Tuesday denied the CN-KCS request for a voting trust while the merger underwent regulatory review, TCI followed through, calling for former CN Chief Operating Officer Jim Vena to replace Ruest and seeking the addition of former Illinois Central and CN board member Gil Lamphere to the current board [see “Major CN investor calls for ouster …,” Trains News Wire, Aug. 31, 2021].
Walker told the Globe and Mail the next steps in the effort to remove Ruest and Pace were not clear and depended on what other shareholders will do.
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