Shareholder Activism at Canadian Pacific
(13 pages of text)
Canadian Pacific (CP), a North American railway company, had recently come under attack from an activist shareholder, Pershing Square Capital Management (Pershing). Pershing had accumulated a 14 per cent shareholding in CP and had recently announced its intention to replace the CP board of directors and its chief executive officer. The case reviews the history of CP, its recent performance relative to Canadian National, and the basis for Pershing's allegations that CP had lagged its competitor in terms of performance and that this was attributable to poor governance and management. The board of CP must decide whether to make concessions to Pershing or risk an all-out proxy battle which it may well lose.
To introduce students to key issues in corporate governance, specifically activist shareholders and threatened or actual proxy battles. This case could be used in strategy, general management or corporate governance courses or programs.
Transportation and Warehousing
Canada; United States, Large, 2012
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