(The Associated Press circulated the following story by Samantha Bomkamp on July 16.)
NEW YORK — CSX Corp. says preliminary results of the railroad’s contentious board vote show that four out of five directors nominated by activist hedge fund shareholders TCI and 3G Capital have been elected to its board.
The company said Wednesday shareholders elected TCI Founder Chris Hohn, 3G Managing Director Alexandre Behring, Gilbert H. Lamphere and Timothy T. O’Toole. Lamphere is a managing director of private investment firm Lamphere Capital Management and a former director at Canadian National Railway Co. O’Toole is managing director of the London Underground.
The only candidate nominated by the activist shareholders not elected was Gary Wilson, a former chairman at Northwest Airlines Corp.
Existing CSX board members that were re-elected include: Donna M. Alvarado, John B. Breaux, Steven T. Halverson, Edward J. Kelly III, John D. McPherson, David M. Ratcliffe, Donald J. Shepard and Chairman and Chief Executive Michael J. Ward.
Chairman and Chief Executive Michael Ward said in a conference call Wednesday that final results might not be available for another month.
The results, which are subject to a review and challenge period, were tallied by an independent proxy examiner. They will not be final until the completion of a pending CSX appeal of a prior U.S. District Court ruling on the proxy battle, Ward said.
On June 11, U.S. District Judge Lewis A. Kaplan ruled that he could not stop the hedge funds from voting their shares at CSX’s annual shareholder meeting even though the funds violated securities laws — by understating their stake in CSX — to gain enough shares to nearly control the company. The hedge funds own an 8.7 percent stake in CSX, but have economic exposure to 12.3 percent more through swap contracts.
Ward said he expects additional briefs related to the ruling to be filed later this month. Oral hearings on the appeal are set for Aug. 25.
“So until we fully work through all of that…I don’t know (that) we will know the final results of that election,” Ward said.
CSX shares rose $3.37, or 5.8 percent, to $61.26 in morning trading. Late Tuesday, the company said its second-quarter earnings rose 19 percent on strong demand for coal, grain and metals.
The company’s stock has ranged from $38.09 to $70.70 over the past year.