Canadian National Railway Co. has called a special meeting of shareholders for March 22 in response to a request from an activist investor unhappy with CN’s bid for Kansas City Southern.
British-based TCI Fund Management Ltd. is seeking an overhaul of the railway’s board of directors and the replacement of CN chief executive Jean-Jacques Ruest.
Montreal-based CN says it remains focused on pursuing its growth and value creation strategy despite “TCI’s inappropriate attempts to seize effective control of the company.”
CN says it has already added three new independent directors and achieved gender parity among independent directors ahead of plan. It also secured a US$700-million break fee after abandoning its bid for KCS, which instead has agreed to merge with Canadian Pacific Railway Ltd.
TCI called for the shareholder meeting for the purpose of “refreshing” the railway’s board by adding four members that it has nominated. It has also proposed Jim Vena, former chief operating officer at CN, as a potential replacement to Ruest.
CN says TCI is in a conflict of interest because while it owns five per cent of the railway, it is also the largest shareholder of Calgary-based CP Rail.