American hedge fund held about 6.4 per cent of the company's equity
CALGARY—The American activist investor who forced Canadian Pacific Railway to bring E. Hunter Harrison out of retirement to act as CEO in 2012 is selling stock worth $1.9 billion.
Pershing Square Capital Management L.P., the hedge fund controlled by Bill Ackman, and Calgary-based CP Rail announced jointly after markets closed Aug. 3 that the fund will sell its entire 9.8-million shares, about 6.4 per cent of the company’s equity, through a public offering.
The stake is worth $1.9 billion at the railway’s closing price of $192.49 on the Toronto Stock Exchange on Wednesday. When Pershing first confirmed it had bought a 12.2 per cent stake in the railway in October 2011, the stock was trading for about $69.
According to a Canadian Pacific regulatory filing earlier this year, Ackman held 13.9-million shares indirectly through Pershing as of Feb 29. Pershing reportedly sold a large block of its shares in April.
Ackman has been a director at the railway since May 2012 and backed its US$30-billion bid to buy U.S.-based Norfolk Southern railroad that failed earlier this year.
Last month, Canadian Pacific confirmed that president Keith Creel will succeed 71-year-old Harrison as CEO when he retires next summer.
J.P. Morgan, Credit Suisse and Bank of America Merrill Lynch are to act as underwriters for the Pershing offering, the companies said. None of the shares are being sold by Canadian Pacific and it will not receive any of the proceeds, they said.