Ackman plays big role in laying out Canadian Pacific rail deal

By Svea Herbst-Bayliss
BOSTON, Dec 8 (Reuters) - Billionaire investor William
Ackman is playing an outsized role in railway Canadian Pacific's
CP.TO plan to buy rival Norfolk Southern (N:NSC) NSC.N , underscoring
his efforts to bring home a deal to salvage an otherwise awful
2015 for the hedge fund manager.
Ackman sits on Canadian Pacific's board of directors and his
$14.8 billion Pershing Square (N:SQ) Capital Management owns 9.1
percent of the company. Ackman was the last to speak on a
conference call on Tuesday that spelled out an enhanced bid for
Norfolk Southern.
By the time the call ended 2-1/2 hours later, Ackman was
doing most of the talking, laying out how much Norfolk Southern
shareholders could earn on a merger, noting that Canadian
Pacific would be willing to agree to a breakup fee if a deal did
not materialize, and highlighting what he called a lack of
operational expertise by Norfolk Southern's chief executive,
James Squires.
Ackman became a favorite with pension funds and wealthy
investors by delivering double-digit returns since launching his
firm. This year, however, he is down 17 percent, mainly because
his bet on drugmaker Valeant Pharmaceuticals (N:VRX) VRX.TO has
crumbled - and in contrast to last year's 40 percent gain.
At CP, Ackman had not participated in a company conference
call since Pershing Square's 2012 landslide proxy victory which
earned him and partner Paul Hilal board seats and allowed him to
hand-pick CP CEO Hunter Harrison.
Pershing Square has quadrupled its money on its investment
in Canadian Pacific since 2011. But Ackman's bet on the company
has been under pressure as railroad stocks have pulled back
roughly 30 percent this year amid slower growth in China.
Investors in Pershing Square say a deal that would boost
CP's stock could help the hedge fund narrow its loss this year.
Ackman underscored that Harrison made overtures to CSX Corp (N:CSX)
CSX.N last year and said Harrison is driving the bid to buy
Norfolk Southern this year. On the call Ackman and Harrison said
they have both been in touch with Norfolk Southern shareholders
who want their help in improving the company's performance.
Ackman has used his position as an investor to push for
deals before. Last year he worked with Valeant on its failed bid
to buy Allergan (N:AGN_pa).