(Reuters circulated the following on June 3.)
BOSTON — U.S. railroad CSX Corp., locked in a proxy battle with two hedge funds, urged shareholders in a letter on Tuesday to vote against the activist investor group’s proposed slate of five directors, saying they had “no plan” for the company.
“The TCI Group, which is promoting a slate of five new directors for the CSX board, has no plan and no new ideas for the company,” wrote Michael Ward, chairman and chief executive of Jacksonville, Florida-based CSX. “They’ve made demands that we believe would damage CSX and impair the value of your investment — ideas such as saddling CSX with ‘junk’-rated debt or doing a leveraged buyout at $50 a share, with the stock price now in the high $60s.”
The hedge funds TCI and 3G Capital together own an 8.3 percent stake in CSX. They have nominated a slate of directors that includes Chris Hohn, head of the $15 billion London-based TCI fund, and four others with prior experience as executives or directors at railroads and airlines.
The railroad and the funds have sued each another, charging violations of securities laws. TCI’s formal name is The Children’s Investment Fund.
CSX’s annual shareholder meeting is scheduled for June 25 in New Orleans.