By Dave Sebastian

 

Canadian National Railway Co. shareholders CIFF Capital UK LP and the Children's Investment Master Fund, acting by their investment manager TCI Fund Management Ltd., have laid out their board nominees as they plan to call for a board refresh and a change in chief executive.

TCI first announced publicly its intention to call a shareholder meeting last week. On Sunday, Kansas City Southern said a recent takeover from Canadian Pacific Railway Ltd. is superior to the one it had accepted from Canadian National.

TCI on Monday said the four nominees are Gilbert Lamphere, the chairman of freight-rail company MidRail Corp.; Allison Landry, an independent director on the board of less-than-truckload carrier XPO Logistics Inc.; Rob Knight, the former finance chief of Union Pacific Corp.; and Paul Miller, a Canadian National executive from 1978 to 2011.

If elected, the nominees will help select their candidate, Jim Vena, as chief executive, TCI said. Mr. Vena served at CN as chief operating officer and worked at the company for 40 years.

A spokesman for Canadian National said the company has no immediate comment.

TCI owns 5.2% of outstanding shares in the company, according to FactSet. It also owns a roughly 8% stake in Canadian Pacific and favors a deal between that railroad and Kansas City Southern.

As set out in the terms of its existing agreement with Kansas City Southern, Canadian National now has five business days to improve its offer to avoid termination of the deal. It could also choose to walk away--and receive a $700 million breakup fee and reimbursement for a similar fee it previously covered.

Canadian National's bid suffered a major setback Aug. 31, when the Surface Transportation Board, a five-member panel that must bless mergers of freight railroads, ruled that the company wouldn't be permitted to complete a deal using a temporary voting trust that was a crucial to part of the offer. The STB ruled that Canadian National hadn't demonstrated that its use of a voting trust would be consistent with the public interest.

Chris Hohn, TCI's founder and managing partner, criticized Canadian National's bid for Kansas City Southern, saying that the board "misjudged" the STB. "CN should focus on getting better rather than bigger," he said.

 

Write to Dave Sebastian at dave.sebastian@wsj.com

 

(END) Dow Jones Newswires

September 13, 2021 09:46 ET (13:46 GMT)

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