(The Associated Press circulated the following story by Travis Reed on December 19.)
ORLANDO — An activist London asset manager intensified pressure Wednesday on CSX Corp. to change leadership by partnering with a private firm and nominating a new minority slate for the rail company’s board.
The Children’s Investment Fund Management LLP has been trying for months to leverage its 4.2 percent ownership of outstanding CSX shares into changes for the Jacksonville-based rail carrier. CSX officials rebuffed those efforts, and TCI launched a new partnership detailed in a Securities and Exchange Commission filing.
TCI formed with 3G Capital Partners Ltd., which manages a global investment fund and owns about 4.1 percent of CSX’s outstanding shares, giving the partnership 8.3 percent total. The members also hold derivative securities with economic interest in an additional 11.8 percent.
“CSX’s incumbent board has overseen a railroad that for many years has lagged its peers on many of the key metrics of operational and financial performance,” said TCI Managing Partner Christopher Hohn, who is among the board nominees.
The remaining four have experience managing railroads or overseeing rail company splits and mergers — some of it vast. For example, Alexandre Behring, 3G’s managing director, is a locomotive engineer and for seven years was CEO of America Latina Logistica, a huge Latin American rail company.
The other nominees are Gilbert Lamphere, managing director of private investment firm Lamphere Capital Management; Timothy O’Toole, managing director of the London Underground; and Gary Wilson, former chairman of Northwest Airlines.
The slate will be up for election at the company’s 2008 annual shareholders meeting.
CSX, which is the largest railroad operator in Florida and No. 1 in the eastern United States, said in a written statement it stood behind the current board.
“This group of directors has driven the company’s successes, including nearly tripling the stock price in the past three years, and provided shareholders a return better than the rest of the North American rail industry and 89 percent of all S&P companies,” the statement said.
CSX shares fell 40 cents to close at $43.21.