Tuesday, 23 August 2016
Last updated 13 min ago
Jul 28 2008 | 2:00am ET
CSX Corp. is conceding victory—in part—to a pair of activist hedge funds seeking representation on its board of directors.
The U.S. railroad giant said on Friday it will seat two of the nominees proffered by The Children’s Investment Fund and 3G Capital Partners who were elected by shareholders after a nasty proxy battle last month. But CSX is refusing to seat two others that the hedge funds claim victory for, calling the election too close to call.
According to Michael Ward, chairman of the Jacksonville, Fla.-based railroad, those two candidates—TCI chief Christopher Hohn and Timothy O’Toole, managing director of the London Underground—have a lead of less than one-fifth of 1% of shares entitled to vote. Ward said the vote review process could end as early as next week, but that its court battle with the hedge funds—CSX is seeking to have TCI and 3G stripped of their voting rights for securities law violations—may go on for another two months.
Unsurprisingly, the hedge funds were not satisfied with the seating of Alexandre Behing, 3G’s managing director, and Gilbert Lamphere, a hedge fund manager and former director at Canadian National Railway Co.
“We urge the company to respect the law and the will of its shareholders by seating the elected board of directors immediately after the election results are certified—and to stop unnecessarily delaying the certification process,” the hedge funds said in a statement.
“We believe the certification process will confirm that shareholders have elected four of our nominees to the CSX board. This latest tactic should be seen for what it is—a cynical attempt to thwart the expressed will of CSX shareholders.”