CN Fights Back Against TCI Claims

Canadian National is fighting back against by an activist investment firm seeking to change the railroad’s management.

TCI Fund Management  wants to replace CN CEO J.J. Ruest, Chairman Robert Pace and name five new members of the CN board of directors.

Late last week CN said TCI’s claims about CN finances are “false or misleading.” It also said TCI has yet to acknowledge that it is a leading shareholder in Canadian Pacific, one of CN’s chief competitors.

CN said TCI has yet to offer a credible plan to create value for shareholders.

 “CN has announced an ambitious strategic plan to deliver immediate and long-term shareholder value, while retaining our commitment to safety, customer service and the communities we serve. This plan builds on the investments we have made in technology and capacity over the past three years to drive long-term sustainable growth in total revenues and operating margins,”  Ruest said in a statement referencing the Full Speed Ahead plan to reduce CN’s operating ratio, cut capital spending, and increase shareholder returns through a combination of earnings growth and share buybacks.

TCI has dismissed the Full Speed Ahead plan and raised questions about whether CN management could successfully follow through on its goals.Based in London, TCI holds $4 billion in CN stock.

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