(The following story by Robert Wright appeared on the Financial Times website on April 27, 2009.)
LONDON — The Children’s Investment Fund, the controversial activist investor, has pulled out of the last of the companies where it has fought high-profile battles for control, selling most of its shares in CSX, the US railway.
The sale brings to an end a struggle for control of CSX, the US’s third-largest rail operator, that had become a highly personal struggle between Michael Ward, CSX’s chief executive, and Chris Hohn, TCI’s founder and chief executive.
TCI, one of the most successful investors of the past decade’s boom years, has sold stakes in Deutsche Börse, of Germany, and in J-Power, of Japan, a power utility.
The fund also headed the campaign that eventually led to ABN Amro selling itself to the Royal Bank of Scotland, in the UK.
Senior executives have quit TCI, leaving Mr Hohn alone among the founding senior executives still at the fund. Mr Hohn has given no public explanation of the series of stake sales.
The battle over CSX had been master-minded by Snehal Amin, a US analyst who left the fund last month shortly after James Wilk, operations manager. Mr Wilk had been in the post for just 10 months.
Filings by TCI with the US Securities and Exchange Commission showed the company sold all but a handful of its 4.5 per cent stake in CSX for $515m.
TCI, which worked with 3G, another activist investor, argued that CSX had long under-performed other US railway companies and initially demanded it slash capital investment, nearly double the prices it charged customers and increase its debt to raise pay-outs to shareholders.
The battle ended in court in the US when CSX sought to exclude the two activist investors from voting at its annual meeting.
TCI and 3G were criticised by the judge over their conduct in the battle, particularly their use of indirect shareholding instruments to increase their stake without declaring it to the company.
CSX’s case was ultimately unsuccessful.
After winning backing from several large investment advisory firms in the US, the two activist investors succeeded last July in having four of their five candidates elected to CSX’s 12-member board.
TCI declined to comment on why it had sold the shares.