Hedge Funds Fail To Win Proxy Service Backing In CSX Fight

Jun 17 2008 | 2:00am ET

A pair of proxy advisers has dealt a setback to the activist hedge funds seeking to elect a dissident slate to CSX Corp.’s board of directors.

Proxy Governance has recommended that shareholders vote for only two of the five nominees proffered by The Children’s Investment Fund and 3G Capital Partners. Meanwhile, Egan-Jones Proxy Services advised CSX investors to back the management slate in toto.

“TCI’s agenda is damaging and could impair the value of the shareholders,” Egan-Jones wrote. “In contrast to the successful strategies implemented by the Board and management team, TCI’s interactions with CSX since last 2006 demonstrate a history of unsound ideas that would not have created value for CSX shareholders and, in some cases, would have destroyed value.”

By contrast, Proxy Governance had some kind words for the hedge funds.

“The dissidents have made a convincing argument that the company could be doing even better and that adding a greater degree of railroad operating experience to the board would make it more informed,” it said in a statement.

Still, it gave its backing to just two members of the dissident slate, including 3G’s Alexandre Behring—a former railroad executive—but withholding their support for TCI chief Christopher Hohn.

The hedge funds argue that the railroad is mismanaged and could achieve more than five times the annual productivity gains that CSX has targeted. CSX has countered that the hedge funds have engaged in a systematic campaign to hide the size of their stake in the company—allegations that won the backing of a federal judge, though that judge declined to punish TCI and 3G in any meaningful way.


CSX Loses Bid To Block Hedge Fund Votes
Hedge Fund TPG Axon Backs TCI, 3G In CSX Battle
Hedge Funds Deny Secret Scheming Over CSX
CSX Chief Feels ‘Targeted’ By TCI
TCI Countersues CSX, Alleging Insider Dealing
Railroad Co. Fires Back At Hedge Funds With Lawsuit

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


Hedge Funds Swarm Into Palm Beach

Oct 27 2016 | 2:32pm ET

As the first flakes of snow fall on New York's northern suburbs, Dan Weil of South...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...