Florida Times Union – CSX Corp.’s proxy fight with two hedge funds apparently ended Monday, after an appellate court turned down CSX’s attempt to block some of the funds’ votes for the company’s board of directors.

CSX, which had already seated two representatives of The Children’s Investment Fund Management LLP and 3G Capital Partners Ltd. on its board, said Monday it will now add two additional TCI and 3G nominees.

All four TCI-3G nominees won election to CSX’s 12-member board of directors at the company’s shareholders meeting in June. But after the votes were counted, CSX said it would only seat two of them until its court case was resolved.

On Monday, a three-judge panel of the U.S. Court of Appeals for the Second Circuit ruled against CSX, upholding a June decision by U.S. District Judge Lewis Kaplan. CSX had filed a lawsuit saying that TCI and 3G violated federal disclosure laws about their stock ownership in CSX. Kaplan agreed that the funds violated those laws, but said that did not give him the authority to block their proxy votes.

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Chicago Tribune – The leader of an activist hedge fund with a significant stake in Sara Lee Corp. has been added to the foodmaker’s board of directors.

Downers Grove-based Sara Lee said Thursday that it is expanding its 10-member board by one, naming Jeffrey Ubben, founder and chief executive of ValueAct Capital, to the new spot. Last winter, San Francisco-based ValueAct bought a 5 percent stake in Sara Lee, maker of bread, hot dogs and meat products sold under such brands as Hillshire Farms and Jimmy Dean.

Activist investors often buy into what they perceive as undervalued companies and then urge significant changes. But ValueAct is considered less strident than some other activist funds, saying at the time of its purchase that it had no plans to push for strategic change at Sara Lee and was comfortable with the firm’s direction.

Neither Sara Lee, which is in the midst of a multiyear turnaround effort, nor ValueAct could be reached.

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New York (HedgeCo.Net) -The much anticipated annual meeting of railroad operator CSX took an odd turn when results of Board elections were kept from the media and CSX head Michael Ward abruptly ended the meeting.

The elections were a subject of great debate, after months of pressure brought on by hedge funds TCI and 3G Capital Partners, who during a 6-month long proxy battle nominated a dissident slate for the 12-member board.

According to CSX, results weren’t readily available because they were “too close to call.” The hedge funds believed that they won at least two seats and maybe four, said Snehal Amin, founding partner of TCI. The hedge funds declared it was a “victory for all shareholders.”

"Our proxy advisors are trying to figure out with large financial institutions whether they changed their votes," Amin said, referring to the shareholders. "Hopefully not enough changed their minds to affect the outcome."

The proxy battle was sparked by the hedge funds’ desire to elect those with experience in the railroad industry to the board, something they say the current board lacks. Hedge funds like TCI and 3G are known for pushing for strategic change within companies to fuel high returns for shareholders.

Ward, who has resisted the hedge funds advances, repeated his position to the crowd gathered in New Orleans. "CSX has a disciplined management that favors building lasting shareholder value. The board sets aggressive goals and holds management accountable for achieving them."

To which Amin shared his view, “We believe CSX can and should be the best railroad in America. [Our candidates] have real railroad experience, they know the right questions to ask and have the economic incentives to do so."

CSX says the results of the vote will be announced on July 25^th at the company’s headquarters in Jacksonville, Florida.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Bizjourmals.com- The country’s largest proxy advisory company recommended the election of four of the five board members nominated by hedge funds engaged in a proxy contest with CSX Corp.

The Children’s Investment Fund Management LLP and 3G Capital Partners Ltd. have nominated five new members for CSX’s 12-member board.

The RiskMetrics Group, a proxy advisory company, withheld recommending Gary Wilson. It also recommended rejecting CSX’s proposal that would allow shareholders to call special meetings except on topics voted on within the last year. Because CSX elects board members at its annual shareholder meeting, that would bar special meetings to recall board members. RiskMetrics said the proposal would further entrench the board and isolate shareholders.

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