The Lexpert Guides to the Leading US/Canada Cross-Border Corporate and Litigation Lawyers in Canada profiles leading business lawyers and features articles for attorneys and in-house counsel in the US about business law issues in Canada.
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SHAREHOLDER ACTIVISM THE SHAREHOLDER ACTIVISM PENDULUM BY JULIUS MELNITZER IF THERE WAS ever a cautionary tale to be derived from proxy contests in Canada, the battle involving Canadian Pacific Rail Limited that preoccupied the business news media for months surely stands at the head of the list. "This was an historic situation and a wake-up call for Canadian boards because it resulted in a major change to the composition of the board of a widely held Canadian corporation," says Andrew MacDougall in Osler, Hoskin & Harcourt LLP's Toronto office. Dissatisfied with the railway's stock market underperformance despite its long history of profitability, its blue chip board and its corporate governance leadership, funds controlled by Pershing Square Capital Management, Inc. began accumulating stock and negotiating with management. When talks broke down in January 2012, an aggressive proxy battle ensued after Pershing requisitioned a shareholder meeting. In anticipation of the May 2012 meeting, Pershing filed a dissident information circular and began holding its own public investor meetings. When support came from proxy advisory firms Institutional Shareholder Services and Glass, Lewis & Co., and prominent Canadian institutional investors including the Canada Pension Plan Investment Board and the Ontario Teachers' Pension Plan Board, CP's dye was cast. PHOTO: SHUTTERSTOCK HIGH-PROFILE PROXY BATTLES AND SHAREHOLDERFRIENDLY RULES HAVE CORPORATE CANADA ON THE DEFENSIVE. BUT RECENT AND PROPOSED CHANGES MAY LESSEN THE THREAT 22 | LEXPERT • June 2013 | www.lexpert.ca B-00-Features.indd 22 13-05-29 2:21 PM