(Reuters circulated the following on June 9.)
NEW YORK — TPG Axon Capital Management, a $16 billion hedge fund group and major shareholder in CSX Corp., has thrown its support behind a dissident proxy campaign at the rail company, a person familiar with the situation said on Monday.
TPG Axon, which is managed by former top Goldman Sachs trader Dinakar Singh, holds 9.7 million shares, or about 2.4 percent, of CSX, according to regulatory filings. It is the eighth-largest shareholder, according to Yahoo Finance.
CSX shares gained in afternoon trading after news of TPG Axon’s decision. The shares closed up $1.48, or 2.3 percent, at $66.89 on the New York Stock Exchange.
The Children’s Investment Fund (TCI) and 3G Capital Partners, which together hold an 8.7 percent stake in CSX, are seeking investor support to elect a minority slate of five new directors to the CSX board, contending the company is mismanaged and underperforming.
The two firms have also said they hold swaps worth an additional 12.3 percent of CSX, bringing their “economic exposure” to the company to about $5 billion.
Singh, the former co-head of Goldman’s principal strategies, or proprietary trading, unit, founded TPG Axon in 2004 in partnership with TPG, the private equity firm.
A TPG Axon spokesman declined to comment.
The months-long proxy battle launched by TCI has grown increasingly contentious. CSX sued the two dissident groups in March, accusing them of violating securities laws by failing to disclose their stock holdings earlier.
The Jacksonville, Florida-based company asked the court to block the hedge funds from running their slate and force them to sell part of their stake. The hedge funds countersued, accusing CSX of breaches of securities laws, including illegally enriching corporate directors.
CSX is slated to hold its annual meeting on June 25, 2008.