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Bizjournals.com- CSX Corp’s board is in for a bumpy ride despite assurances from the railroad and two rival hedge funds they will work together to maximize profitability, a railroad analyst said.
"Everyone is human and the proxy fight between them has gotten ugly at times," said Lee Klaskow, a Longbow Research senior analyst.
Four out of five of the nominees put forth by The Children’s Investment Fund Management LLP and 3G Capital Partners Ltd. have been voted in by shareholders, according to the independent inspector of the election’s preliminary report. As reported, the vote is a sound defeat for CSX CEO Michael Ward and his managment group, which fought hard to convince shareholders to avoid the candidiates backed by the hedge funds.
Klaskow said the board changes won’t change day-to-day operations, but they may affect long-term ones, as the hedge-fund-nominated members will likely make more aggressive proposals.
New York Times- Christopher Cooper-Hohn and his wife, Jamie, follow a simple economic formula: he makes money, and she gives it away.
Mr. Cooper-Hohn runs the Children’s Investment Fund, or T.C.I., a successful — and controversial — hedge fund that has become a gadfly to corporate giants like CSX, the American railroad. Ms. Cooper-Hohn leads an affiliated charity, the Children’s Investment Fund Foundation, which uses some of the profits that T.C.I. earns to finance programs for underprivileged children.
The partnership has made the Cooper-Hohns the most generous philanthropists in Britain. Last weekend, their foundation reported a £439 million ($856 million) jump in funds for fiscal 2007, reflecting £324 million in donations from T.C.I. and the Cooper-Hohns.
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 25th 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.
New York (HedgeCo.Net) – The proxy battle waged by two hedge funds against railroad operator CSX is far from over, despite a ruling against the funds last week.
TCI, who runs the Children’s Investment Fund of Britain, and 3G Capital Partners, continue in their quest to elect 5 nominees to the board of CSX, citing lack of railroad experience among the current 12 members. The hedge funds have a combined 8.7% share in CSX.
A Manhattan court recently ruled that the two hedge funds had violated disclosure regulations, though there was nothing the judge could do to stop the funds from voting their shares at the company’s annual meeting on June 25, much to the dismay of CSX.
The ruling also stated that, “any penalties for defendants’ violations must come by way of the Securities and Exchange Commission or the Department of Justice.” CSX may appeal the decision.
The hedge funds wish to gain seats on the board in order to gain a strategic vantage point from inside the company. Funds may do this in an attempt to gain higher returns for shareholders.
“Michael Ward, the Chairman and CEO of CSX, wondered why we haven’t just taken our profits and sold our shares, much as the board and management of CSX have done over the past two years. If we believed that CSX already had achieved its full operating potential, that’s exactly what we would do. However, in our view, CSX has only just begun to improve…” said the hedge funds in a recent letter to shareholders, prompting them to send in their proxy cards.
Alexandre Behring from 3G and Chris Hohn from TCI are two of nominees looking to gain seats. The other three hopefuls are not affiliated with the funds, but have experience in the railroad industry, something that the fund’s believe is crucial to the value of the company.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Forbes- Shares of railroad operator CSX Corp. may trade actively Thursday after a federal judge’s ruling opened the doors to a proxy battle later this month.
On Wednesday afternoon, the judge ruled that dissident shareholders broke the law in their effort to change CSX’s corporate structure, but did not block them from voting for their nominees to the company’s board.
Jacksonville, Fla.-based CSX had sued the two hedge funds in March, accusing them of using share swap contracts to evade federal securities filing requirements.
New York (HedgeCo.Net) – CSX and dissident shareholders sounded off yesterday, as they shared their cases to an advisory firm and outlined their differing plans for the railroad operator’s future.
With a proxy fight in the future, TCI and 3G Capital, the two activist hedge funds, will have to urge shareholders to elect their proposed board of directors. Meanwhile, Michael Ward, Chairman and CEO of CSX, has different plans.
He once again pushed for shareholders to reject the hedge funds suggestions, citing their CSX’s strong stock performance in the first quarter and warning that the hedge funds were ultimately interested in a possible leveraged buyout.
TCI head Chris Hohn responded by saying, “If we were just looking to make a quick buck, we would have left CSX a long time ago.”
He went on to say that he is seeking nothing more than operational improvements as well as improvements on the board by replacing those with little or no railroad experience.
This includes placing himself on that board, along with 3G Managing Director Alexandre Behring.
The board of CSX currently has 12 seats. The hedge funds are seeking 5 of those seats and jointly nominated a minority board slate back in December.
The other three nominees are Gilbert Lamphere, who runs a private investment firm but also was a director at Canadian National Railway Co., Timothy O’Toole, Managing Director of the London Underground and Gary Wilson, a former chairman at Northwest Airlines Corp.
The board of directors will be decided by shareholders at the company’s annual meeting on June 25 in New Orleans.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Bizjournals.com- CSX Corp. and the activist hedge funds engaged in a proxy contest with the railroad will make their cases to gain the recommendation of a company many institutional investors rely on when casting shareholder votes.
RiskMetrics Group, a proxy advisory company, will hold a special governance forum at 11 a.m. June 9 in anticipation of CSX’s annual meeting June 25 in New Orleans. The forum, to be webcast, will involve representatives of CSX (NYSE: CSX) and hedge funds The Children’s Investment Fund Management LLP and 3G Capital Partners Ltd.
The hedge funds have teamed to nominate five people to CSX’s 12-member board and make several shareholder proposals.
Reuters- U.S. railroad CSX Corp, locked in a proxy battle with two hedge funds, urged shareholders in a letter on Tuesday to vote against the activist investor group’s proposed slate of five directors, saying they had "no plan" for the company.
"The TCI Group, which is promoting a slate of five new directors for the CSX board, has no plan and no new ideas for the company," wrote Michael Ward, chairman and chief executive of Jacksonville, Florida-based CSX. "They’ve made demands that we believe would damage CSX and impair the value of your investment — ideas such as saddling CSX with ‘junk’-rated debt or doing a leveraged buyout at $50 a share, with the stock price now in the high $60s."
New York Post- A looming decision in a heated lawsuit brought by railroad giant CSX Corp. could shut down a loophole used by activist hedge funds to hide their stake from the market.
CSX alleges that two big hedge funds – The Children’s Investment Fund (TCI) and 3G Capital Partners – used complex swap agreements with investment banks to secretly hide their 12 percent ownership stake in the rail operator.
TCI boss Christopher Hohn admitted in a bench trial Thursday to buying millions of dollars worth of swaps for CSX shares early last year.
Hohn, the son of working-class Jamaican parents who emigrated to London, disclosed his position in CSX last December and has launched a proxy contest to unseat five of the company’s directors.
CNN Money- Two hedge funds urged shareholders of CSX Corp. on Tuesday to elect their minority slate of five board candidates, arguing that their nominees have more industry experience and a greater financial stake in the railroad operator.
The hedge funds are TCI, which manages The Children’s Investment Master Fund, and 3G Capital.
In October, TCI asked CSX’s board to separate the roles of chairman and chief executive, add new directors with railroad experience and present a plan to improve operations. In December, they jointly nominated the minority board slate.
Reuters- The chief executive of CSX Corp said in court on Wednesday he felt targeted by activist investors seeking to get seats on the board of directors, but the rail company negotiated with them in good faith to try to find common ground.
CSX sued The Children’s Investment Fund Management, a hedge fund known as TCI, and another fund, 3G Capital Partners, in March, contending they violated securities laws in their efforts to nominate a slate of directors for election at the company’s annual shareholder meeting.
The funds are trying to get five directors onto the 12-member CSX board.
