Glass Lewis Advises that Investors Withhold Votes from Eight Incumbent Nominees; Egan-Jones Recommends Withholding Votes From All Current Directors

NEW YORK, May 9, 2012 //- Pershing Square Capital Management, L.P. (“Pershing Square”) today announced that proxy advisor Glass, Lewis & Co. and independent credit rating agency Egan-Jones Ratings Co. have both issued reports that offer total support for  the Nominees for Management Change at Canadian Pacific Railway Limited’s (“Canadian Pacific”) (TSX: CP; NYSE: CP) upcoming annual general meeting of shareholders on May 17th.

The resounding endorsements from these advisory services firms adds to support from proxy advisor Institutional Shareholder Services (ISS), which also backed all seven of the Nominees for Management Change.

Like ISS, Glass Lewis and Egan-Jones both recommend that shareholders vote “for” all seven of the Nominees for Management Change.

Egan-Jones advises that investors “withhold” votes from all of CP’s current directors and Glass Lewis recommends withholding votes from eight incumbent directors.

Glass Lewis, Egan-Jones and ISS all recommend that shareholders vote on Pershing Square’s BLUE form of proxy.

These recommendations represent a unanimous and resounding endorsement of Pershing Square’s proposed slate of directors, the Nominees for Management Change.

“We are delighted that proxy advisors Glass Lewis and Egan Jones have joined ISS in strongly endorsing change at CP – all three of the major North American proxy advisors recommend that CP shareholders vote on the Blue proxy for all seven of the Nominees for Management Change,” said William A. Ackman, CEO of Pershing Square. “Notably, ISS, Glass Lewis and Egan Jones recommend shareholders withhold from six, eight, and all 15 of the incumbents respectively.  We are unaware of so powerful and uniform an endorsement for change in the history of large cap activism.”

“The Nominees for Management Change comprise two shareholder representatives, and five highly regarded executives known for their independence and integrity.  A strong mandate from shareholders will enable a minority of new independent voices to be heard even among a majority of legacy directors who have to date unanimously opposed change.  A withhold vote against all incumbents contributes most strongly to that mandate, and importantly does not change the fact that the top sixteen vote recipients will all become directors.”

“Bolstered by a shareholder mandate for change, in just eight days the Nominees for Management Change will have the opportunity to reset the board’s culture, deliver fresh views and perspectives, and help lead CP through a CEO change and toward a brighter future. Shareholders can do their part by voting for all seven Nominees for Management change and withholding from all incumbent directors.  Each of us is grateful for the opportunity to serve the Company and all its stakeholders.”

Glass Lewis

In their report, Glass, Lewis & Co. states:

“Despite multiple plans and initiatives, under the same general approach and culture, CP’s operating performance has languished for four years while all other railroads have improved. Based on these results, we believe it’s time for a change in leadership at CP.”

“We believe the Company’s serial underperformance from a total shareholder return perspective and its industry-worst operating performance require a far-reaching overhaul of the board and senior management in order for CP to achieve results closer to those of its peers. The record shows that under Mr. Green’s and the current board’s leadership, CP’s shareholders have suffered through most periods, whether in times of boom, bust or recovery, relative to the performance of other railroads.”

“In conclusion, we believe the Dissident presents a compelling case for the need to overhaul CP’s current leadership. We also agree that simple board representation isn’t likely to produce the results that shareholders desire. Rather, an injection of all seven of the Dissident’s nominees is warranted, in our view. Further, we support Pershing Square’s plan to replace Mr. Green.”

“We believe shareholders should specifically withhold support from eight current directors based on their unyielding support for Mr. Green, their lengthy tenures overseeing CP during periods of underperformance or their culpability in allowing the Company to remain a laggard for so long.”

Egan-Jones

In the report, Egan-Jones states: “We believe that voting on the dissidents’ ballot FOR the dissidents’ Nominees is in the best interest of the Company and its shareholders.”

In arriving at that conclusion, Egan-Jones’s report states that it considered the following factors:

• Their belief that the management’s Multi-Year Plan will not maximize the Company’s shareholder value.

• Their belief that placing the dissidents’ nominees on the Company’s board of directors would work to the benefit of the Company’s shareholders.

• The Company’s notably lagging financial performance when contrasted with that of its rival Canadian National.

• Their belief that election of the slate of Nominees proposed by the dissidents will send the management a strong signal for needed change. 

If you have not already done so, please vote the BLUE proxy or voting instruction form today.  A vote FOR all seven of the Nominees for Management Change, and WITHHOLD against all 15 incumbent directors, will have the greatest impact.  As the meeting is quickly approaching, we encourage you to vote your shares by Internet or by telephone, by following the instructions set out in the BLUE proxy or voting instruction form.  Shareholders are reminded that they may still submit a BLUE proxy or voting instruction form even if they have previously submitted a white form.  A properly completed BLUE form of proxy or voting instruction form will override and supersede any earlier form of proxy or voting instruction submitted by you in respect of the meeting.

Contact:

Jennifer Burner
(212) 260-8813
jburner@globalstrategygroup.com

Martha Durdin
(416) 642-4735
mdurdin@navltd.com

Additional Information

To keep current with all further developments and for information about how to vote your shares and to obtain a copy of Pershing Square’s proxy circular and other shareholder communications, please continue to visit https://live-cp-rising.pantheonsite.io.  If you are a shareholder and have not already done so, please vote your BLUE proxy or voting instruction form FOR all seven Nominees for Management Change, and WITHHOLD from all 15 incumbent directors or vote for up to nine incumbent management nominees.  If you  have any questions, need assistance in voting your BLUE proxy or voting instruction form or need a BLUE proxy or voting instruction form, please call Pershing Square’s proxy solicitor in Canada, Kingsdale Shareholder Services Inc., at 1-866-851-3214 toll-free in North America, or at 1-416-867-2272 outside of North America (collect calls accepted), or Pershing Square’s proxy solicitor in the United States, D.F. King & Co., Inc., at 1-800-659-5550 toll-free in North America, or at 1-212-269-5550 outside of North America (collect calls accepted).  We also invite you to share your comments by going to the comment section of the CPRising website.

The post Leading Advisory Firms Continue to Back Nominees for Management Change and Reject Status Quo at CP; All Three Unanimously Support Change appeared first on CP Rising.

“We are honoured by Ontario Teachers’ strong expression of support – they voted for all seven Nominees for Management Change, and voted withhold against all fifteen incumbents.  This vote, from one of Canada’s most important institutions, sends the strongest possible signal that the past has been unacceptable, and that the future must be different.  A loud and clear message from shareholders will enable the reconstituted board to put the past behind it, have a fresh start, and work most efficiently and effectively toward our shared goal.”

Reporting on the analysis underlying its vote, Ontario Teachers published today:

“We have carefully reviewed the arguments of CP and Pershing Square, considering CP’s historical performance and future opportunities within the context of the best interests of CP and our Plan members going forward. We note CP’s performance has been below its peers during Mr. Green’s tenure as CEO and are not convinced that the most recent results provide irrefutable evidence that CP is performing better than its peers.

CP has failed to persuade us that Mr. Harrison would be a liability for CP. We believe that CP’s multi-year plan (MYP) is similar to those previously executed by Mr. Harrison and that a change in management would not imperil the success of executing the MYP. Therefore, in view of CP’s relative historical underperformance, the proven success of Mr. Harrison executing similar MYPs and the absence of compelling evidence that his appointment is harmful to CP, we believe there is more risk in maintaining the status quo and support change at CP.”

If you have not already done so, please vote the BLUE proxy or voting instruction form today.  A vote FOR all seven of the Nominees for Management Change, and WITHHOLD against all 15 incumbent directors, will have the greatest impact.  As the meeting is quickly approaching, we encourage you to vote your shares by Internet or by telephone, by following the instructions set out in the BLUE proxy or voting instruction form.  Shareholders are reminded that they may still submit a BLUE proxy or voting instruction form even if they have previously submitted a white form.  A properly completed BLUE form of proxy or voting instruction form will override and supersede any earlier form of proxy or voting instruction submitted by you in respect of the meeting.

Cautionary Statement Regarding Forward-Looking Statements                                         

This press release contains forward-looking statements.  All statements that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” and similar expressions are generally intended to identify forward-looking statements.  These statements are based on current expectations of Pershing Square and currently available information.  They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove to be accurate.  Pershing Square does not assume any obligation to update any forward-looking statements contained in this press release, except as required by applicable law.  Please refer to Pershing Square’s proxy circular dated April 4, 2012, which is available at https://live-cp-rising.pantheonsite.io, for further information regarding the risks of these statements.

Contact:

Jennifer Burner
(212) 260-8813 jburner@globalstrategygroup.com

Martha Durdin
(416) 642-4735 mdurdin@navltd.com

Additional Information 

To keep current with all further developments and for information about how to vote your shares and to obtain a copy of Pershing Square’s proxy circular and other shareholder communications, please continue to visit https://live-cp-rising.pantheonsite.io.  If you are a shareholder and have not already done so, please vote your BLUE proxy or voting instruction form FOR all seven Nominees for Management Change, and WITHHOLD from all 15 incumbent directors or vote for up to nine incumbent management nominees.  If you  have any questions, need assistance in voting your BLUE proxy or voting instruction form or need a BLUE proxy or voting instruction form, please call Pershing Square’s proxy solicitor in Canada, Kingsdale Shareholder Services Inc., at 1-866-851-3214 toll-free in North America, or at 1-416-867-2272 outside of North America (collect calls accepted), or Pershing Square’s proxy solicitor in the United States, D.F. King & Co., Inc., at 1-800-659-5550 toll-free in North America, or at 1-212-269-5550 outside of North America (collect calls accepted).  We also invite you to share your comments by going to the comment section of the CPRising website.

The post Pershing Square Statement on Strong Endorsement from Ontario Teachers’ Pension Plan appeared first on CP Rising.

Leading Proxy Advisory Firm Institutional Shareholder Services (ISS) Strongly Endorses All Seven Nominees for Management Change in CP Proxy Contest

Recommends Withholding from Six of Canadian Pacific’s Current Directors

Recommends Canadian Pacific Shareholders Vote the BLUE Form of Proxy

NEW YORK, May 3, 2012 //- Pershing Square Capital Management, L.P. (“Pershing Square”) today announced that leading proxy advisory services firm Institutional Shareholder Services (ISS) issued a report strongly endorsing all seven Nominees for Management Change for election at Canadian Pacific Railway Limited’s (“Canadian Pacific”) (TSX: CP; NYSE: CP) upcoming annual general meeting of shareholders to be held on May 17th.

The report recommends that shareholders vote for all seven of the Nominees for Management Change.

The report also recommends that investors withhold votes from six of CP’s incumbent directors. ISS recommends that shareholders vote on Pershing Square’s BLUE form of proxy.

Collectively, the ISS recommendations represent an unequivocal endorsement of Pershing Square’s alternate slate of directors, the Nominees for Management Change.

“Today’s ISS recommendation brings shareholders one big step closer to the change we need at Canadian Pacific. We thank ISS for adding its important voice to the overwhelming support for the Nominees for Management Change,” said William A. Ackman, CEO, Pershing Square Capital Management. “We are confident that a revitalized Board and a new CEO will return Canadian Pacific to its rightful position as a leader among North American Class I railroads.”

“Consistent with ISS’s recommendation, we ask shareholders to vote for all seven of the Nominees for Management Change.”

In the report, ISS states:

• “What shareholders appear to have witnessed over these directors’ tenure, as a close examination of the evidence in this proxy contest makes plain, is an enduring failure of board leadership, and a bewildering lack of accountability for results.”
• “Because the dissidents have demonstrated a compelling case that poor board oversight has allowed the company’s performance to drift further and further below both its peers and its potential over at least half a decade, it seems clear that change on the board is needed.”

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 NEW YORK, April 23, 2012 //- William A. Ackman of Pershing Square Capital Management, L.P. (“Pershing Square”) today filed a letter to shareholders regarding the election of its Nominees for Management Change to the Board of Directors of Canadian Pacific Railway Limited (“Canadian Pacific”) (TSX: CP; NYSE: CP), in connection with Canadian Pacific’s upcoming annual general meeting of shareholders to be held on May 17th.

To keep current with all further developments and for information about how to vote your shares, please continue to visit https://live-cp-rising.pantheonsite.io.  If you are a shareholder and have not already done so, please vote your BLUE proxy or voting instruction form FOR all seven Nominees for Management Change, and WITHHOLD from all 15 incumbent directors.  If you are a shareholder and have not already received your BLUE proxy materials, please call Pershing Square’s proxy solicitor in Canada, Kingsdale Shareholder Services Inc., at 1-866-851-3214 toll-free in North America, or at 1-416-867-2272 outside of North America (collect calls accepted), or Pershing Square’s proxy solicitor in the United States, D.F. King & Co., Inc., at 1-800-659-5550 toll-free in North America, or at 1-212-269-5550 outside of North America (collect calls accepted).  We also invite you to share your comments by going to the comment section of the CPRising website.

April 23, 2012

Dear Fellow Shareholder,

In his 2001 Canadian Pacific letter to shareholders, then CEO Robert Ritchie wrote:

“Our profitability in 2001 was second-best in the industry based on operating ratio [78%], but I don’t intend for CPR to be the perennial silver medalist.”

Regrettably, these words proved only too prophetic.  Canadian Pacific is no longer the silver medalist, as its operating ratio has deteriorated while the operating ratio of the other Class I railways has improved materially.  CP’s negative 18% total return to shareholders during CEO Fred Green’s tenure[1] reflects its position as the worst managed and poorest performing Class I railway.

The cost to shareholders of CP’s poor board oversight and mismanagement has been enormous.  If you invested $10,000 in Canadian Pacific when Mr. Green became CEO, you would have lost $1,800 and be left with only $8,200 (including dividends) as of the day prior to Pershing Square’s investment in CP.  Alternatively, if you invested $10,000 in a portfolio of the other Class I railways over the same period, you would have $15,900, nearly twice as much.

Mr. Green recently suggested that the 65% appreciation of CP’s shares since Pershing Square began accumulating stock in the Company reflects confidence in management and the incumbent board.  In fact, this appreciation reflects the increased probability – estimated by the top-ranked railroad industry analyst, JP Morgan’s Tom Wadewitz, at 90% – that the current board will be restructured and Mr. Green replaced.

As they have in prior years, the current board and Mr. Green again ask shareholders to believe that sustainable progress is just around the corner.  Unfortunately, the first quarter’s results serve only to remind us of why we shouldn’t.  After six years of promises and “detailed plans,” the Company’s performance is worse than it was in the comparable quarter in 2006, just prior to Mr. Green becoming CEO, despite the benefit of a strong tailwind from this year’s record mild winter.  The chart below shows the lack of progress over Mr. Green’s tenure (lower is better):

To distract attention from the lack of progress during his tenure, Mr. Green compares Q1 2012 performance with even worse performance in Q1 2009, 2010 and 2011.  But Q1 2012 performance benefitted from a strong tailwind (the record mild winter) while Q1 2009-2011 performance was weakened by strong headwinds (the recession and a harsh winter).  The relief from headwinds and the benefit of a tailwind should not be confounded with “successful execution,” yet Mr. Green seeks to do just that.  The incontrovertible fact remains:  under the stewardship of this board and Mr. Green, CP’s performance has deteriorated.

The Board and Mr. Green recently blamed fuel price increases for the deterioration in the Company’s operating ratio since 2006.  Like their other excuses, this one rings hollow.  While CP’s operating ratio deteriorated from 79.6% to 80.1% during Mr. Green’s tenure, the operating ratio of the other Class I railroads –which experienced the same fuel price increase – improved, on average, from 77.9% to 71.4%.

The Board and Mr. Green attempt to divert shareholders’ attention from the Company’s poor financial performance to “improvements” in non-GAAP, non-financial operating metrics.  These metrics are distorted by the material benefit of a record mild winter and the outsized capital and operating expenditures of the Company’s wasteful 2012 Winter Plan.  Such expenditures destroy value and harm shareholders, but they can make selected operating metrics look better.  Absent an accompanying record of improved financial performance, improvements in non-financial operating metrics cannot support a conclusion of sustainable progress.

Our Goal

 The Nominees for Management Change have one simple goal:  to restore CP to its rightful position as one of the best performing railways.  A well-run CP will deliver enormous value to shareholders, substantially improve customer service, and earn back lost market share.  We are highly incentivized to succeed:  the Nominees for Management Change collectively own more than $1.8 billion of CP stock.

The incumbent board and management have failed shareholders, employees and customers.  Their failed stewardship of CP and indifference to concerned shareholders make it clear that nothing less than a fundamental board restructuring and a new CEO will put CP back on track.  This is precisely what the seven Nominees for Management Change will accomplish if elected with a strong mandate for change.

The shareholder vote at the May 17^th, 2012 Annual General Meeting is a referendum on the incumbent Board’s performance and an opportunity for shareholders to set CP on track to a better future.  If you have not already done so, please vote the BLUE proxy FOR all seven Nominees for Management Change, and WITHHOLD from all 15 incumbent directors.  Doing so maximizes the probability that all seven Nominees for Management Change will be elected, and delivers a mandate for new leadership at CP.

Please visit www.CPRising.ca. There you will find our shareholder communications and have an opportunity to submit your comments directly to us.

Sincerely,

William A. Ackman

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements.  All statements that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” and similar expressions are generally intended to identify forward-looking statements.  These statements are based on current expectations of Pershing Square and currently available information.  They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove to be accurate.  Pershing Square does not assume any obligation to update any forward-looking statements contained in this press release, except as required by applicable law.  Please refer to Pershing Square’s proxy circular dated April 4, 2012, which is available at https://live-cp-rising.pantheonsite.io, for further information regarding the risks of these statements.

Contact:

Jennifer Burner

(212) 260-8813

jburner@globalstrategygroup.com

Martha Durdin

(416) 642-4735

mdurdin@navltd.com

Additional Information

Pershing Square has filed a proxy circular dated April 4, 2012 (the “Pershing Square Circular”) in respect of Canadian Pacific’s May 17, 2012 annual shareholder meeting, which has been mailed to shareholders of Canadian Pacific, together with a “universal” BLUE proxy or voting instruction form.  Additional supplemental information will also be made available to shareholders.  Investors and shareholders may obtain free copies of the Pershing Square Circular and related proxy materials at https://live-cp-rising.pantheonsite.io or on Canadian Pacific’s company profile on SEDAR at https://www.sedar.com.  Shareholders may also obtain free copies of the Pershing Square Circular and other relevant documents when they become available by calling Pershing Square’s proxy solicitor in Canada, Kingsdale Shareholder Services Inc., at 1-866-851-3214 toll-free in North America, or at 1-416-867-2272 outside of North America (collect calls accepted), or Pershing Square’s proxy solicitor in the United States, D.F. King & Co., Inc., at 1-800-659-5550 toll-free in North America, or at 1-212-269-5550 outside of North America (collect calls accepted).  SHAREHOLDERS OF CANADIAN PACIFIC ARE STRONGLY ADVISED TO READ THE PERSHING SQUARE CIRCULAR AND RELATED PROXY MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION.

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