Bill Ackman’s hedge fund Pershing Square Capital Management disclosed in a regulatory filing that, as of December 31st, it owned about 2.8 million shares of Canadian Pacific, reports an article in The Wall Street Journal. However, according to insiders, Pershing Square actually owns about 14.8 million shares of the railroad as of March, a stake worth over $1 billion and which would make Ackman one of Canadian Pacific’s top 15 holders.
In 2012, Ackman won a proxy fight that shook up the board and installed a new CEO on Canadian Pacific, whose rail network stretches across Canada and part of the United States. He left that position in 2016—a move that Ackman said was one of Pershing Square’s biggest regrets. He contends that the current investment is friendly, and complimented Canadian Pacific CEO Keith Creel. The railroad’s share price rose about 3% to $80 on the NYSE in the wake of the news; it’s up about 13% so far in 2022. “We are delighted to again be an owner of this remarkable and growing franchise,” Ackman said, as quoted by the Journal.
Canadian Pacific is currently seeking regulatory approval to merge with Kansas City Southern, a $27 billion deal. That merger would create the first freight rail network to connect Canada, the U.S., and Mexico. However, it needs approval from the U.S. Surface Transportation Board, which will only rubber-stamp the deal if the proposed network will “be in the public interest and enhance competition,” a requirement for all major railroad combinations. The Board’s review should be completed by the end of this year, and the proposed combination has already been approved in Mexico, the article concludes.