Tuesday, 1 September 2015
Last updated 27 min ago
Nov 19 2007 | 7:08am ET
The Children’s Investment Fund’s Christopher Hohn knows how to get under executives’ skin, and he has certainly done so with those at CSX Corp.
Last month, Hohn demanded a series of changes at the U.S. railroad giant, which it says has underperformed its peers. Last week, CSX responded.
“TCI’s recent letters and public statements express the view that there is a fundamental lack of quality in CSX’s business results, management and Board,” CSX wrote to the London-based hedge fund. “The Board respectfully disagrees.”
CSX said its operating income has almost doubled since 2004, while its stock price has jumped almost 150%. And in spite of TCI’s protests to the contrary, CSX said it has not been ignoring the hedge fund’s concerns. It simply disagrees.
“This Board is very familiar with TCI’s views of the U.S. rail industry and of CSX,” the letter said. “CSX and its representatives have been in regular communication with TCI throughout this year, and TCI’s proposals have been shared with, and thoroughly analyzed by the Board.” CSX pointed to a dozen board meetings, and “dozens of telephone calls, e-mail exchanges and face-to-face meetings.”
“[The] Board believes that the approaches TCI has offered are not in the best interest of CSX shareholders and, in some cases, have damaged the industry,” the letter concluded.
As is his wont, Hohn isn’t giving up.
“The failure of the CSX board to address in any way the dramatic financial and operations performance of CSX versus its peers reveals a disturbing complacency that should be of serious concern to all CSX shareholders,” TCI said in a statement.
May 27 2015 | 2:15pm ET
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