LONDON, Oct. 19, 2021 /CNW/ -- Long-term
shareholders CIFF Capital UK LP and The Children's Investment
Master Fund, acting by their investment manager TCI Fund Management
Limited (CIFF Capital UK LP, The Children's Investment Master Fund
and TCI Fund Management Limited, together, "TCI"), comments on the
resignation of Canadian National Railway Company's (TSX: CNR)
(NYSE: CNI) ("CN" or "the Company") CEO, J.J. Ruest.
"We appreciate CN's Board of Directors listening to the concerns
of its shareholders, recognizing it has created a problem for the
Company and taking TCI's advice to implement change. Dismissing the
same CEO that the Board put in place just three short years ago is
a good start, but it does not address the fundamental problem of a
lack of leadership, failed strategic oversight, and the vacuum of
operational expertise at the Board level. Putting a new plan out a
month ago without having the CEO needed to implement it is a
massive corporate governance failure and puts the future of the
Company at risk. The good news is TCI has a clear plan and the
right people available now to fix that," said Chris Hohn, TCI Founder and Portfolio
Manager.
"This announcement is a clear admission by the Board that change
is needed, and we are here to help usher in that needed change as
quickly as possible. We have already identified an excellent CEO
candidate in Jim Vena, who is
available now, and we encourage the Board to meet with him
immediately to secure his leadership. In addition, to solve the
governance crisis the Board has created for itself, the Board
should meet with the four independent nominees TCI has put forward
and expedite their appointment to the Board, effective
immediately. We also expect that given the history of failed
CEO appointments, the Board would welcome the advice, expertise and
participation of TCI's nominees on the search committee. As the
Board has demonstrated with this announcement change cannot
wait."
About CEO Candidate Jim Vena
Mr. Vena has a
proven 40+ year track record as an exceptional railroad operator.
He spent 40 years at CN, where he started as a unionized employee
in 1976 and worked his way up to become Chief Operating Officer
from 2013 until his retirement in 2016. Most recently, during his
2.5 years as Chief Operating Officer and Senior Advisor to the
Chairman at Union Pacific, Mr. Vena drove a huge improvement in the
company's operations, service, efficiency and profitability,
resulting in a 650bps improvement in the operating ratio,
US$1.4 billion in efficiency savings
and the best service metrics in the company's history. Mr. Vena is
a Canadian citizen who was raised in Jasper, Alberta.
Read TCI's strategic plan to strengthen CN's governance,
leadership and network, and about the independent, highly-skilled
board candidates at www.CNBackOnTrack.com.
Advisors
Kingsdale Advisors is acting as
strategic shareholder and communications advisor to TCI. ASC
Advisors is acting as communications advisor to TCI. Allen McDonald
Swartz LLP, Fasken Martineau DuMoulin LLP and Schulte Roth & Zabel LLP are acting as legal
counsel to TCI.
About TCI Fund Management
Founded in 2003 by
Sir Christopher Hohn, TCI Fund Management Limited, the
investment manager of CIFF Capital UK LP and The Children's
Investment Master Fund, is a value-oriented, fundamental investor
which invests globally in strong businesses with sustainable
competitive advantages. Using a private equity approach, TCI Fund
Management Limited conducts deep fundamental research,
constructively engages with management and adopts a long-term
investment horizon. For more information on TCI Fund Management
Limited and its ESG policy, visit www.tcifund.com/ESG. TCI
Fund Management Limited is authorised and regulated by the
Financial Conduct Authority.
Disclosures
TCI has been a CN shareholder since
2018. TCI currently owns more than 5% of the shares outstanding
(valued at US$4.3 billion) and is committed to the long-term
success of CN.
Contacts
Kingsdale Advisors:
Ian Robertson
President, Canada
Direct: 416-867-2333
Cell: 647-621-2646
Email: irobertson@kingsdaleadvisors.com
Hyunjoo Kim
Director, Communications, Marketing & Digital
Strategy
Direct: 416-867-2357
Cell: 416-899-6463
Email: hkim@kingsdaleadvisors.com
TCI Media Contacts:
ASC Advisors, New
York
Steve Bruce:
sbruce@ascadvisors.com
Taylor Ingraham:
tingraham@ascadvisors.com
203-992-1230
Information in Support of Public Broadcast
Solicitation
Shareholders are not being asked at this
time to execute a proxy in favour of TCI's nominees for election to
the Board or any other resolutions set forth in TCI's requisition
for the Special Meeting. In connection with the Special Meeting,
TCI has filed a preliminary information circular dated September 27, 2021 (the "Circular") and expects
to issue a supplement thereto or amendment and restatement thereof
(the "Final TCI Circular") containing further disclosure concerning
TCI's proposals, together with additional details concerning the
completion and return of forms of proxy and voting information
forms ("VIFs") to be provided by TCI for use at the Special
Meeting.
This press release and any solicitation made by TCI in advance
of the Special Meeting is, or will be, as applicable, made by TCI
and not by or on behalf of the management of CN.
Shareholders of CN are not being asked at this time to execute
proxies in favour of TCI's nominees (in respect of the Special
Meeting) or any other resolution set forth in the requisition. TCI
intends to make its solicitation primarily by mail, but proxies may
also be solicited personally by telephone, email or other
electronic means, as well as by newspaper or other media
advertising or in person, by TCI, certain of its members, partners,
directors, officers and employees, TCI's nominees or TCI's agents,
including Kingsdale Advisors, who has been retained by TCI as its
strategic shareholder advisor and proxy solicitation agent.
Pursuant to the agreement between Kingsdale Advisors and TCI Fund
Management Limited, Kingsdale Advisors will receive a fee of up to
$3.5 million, plus customary fees for
each call to or from shareholders of CN, and will be reimbursed for
certain out-of-pocket expenses, with all such costs to be borne by
TCI. In addition, TCI may solicit proxies in reliance upon the
public broadcast exemption to the solicitation requirements under
applicable Canadian corporate and securities laws, by way of public
broadcast, including press release, speech or publication, and in
any other manner permitted under applicable Canadian laws. Any
members, partners, directors, officers or employees of TCI and
their affiliates or other persons who solicit proxies on behalf of
TCI will do so for no additional compensation. The costs incurred
in the preparation and mailing of the Circular and the Final TCI
Circular, and the solicitation of proxies by TCI will be borne by
TCI, provided that, subject to applicable law, TCI may seek
reimbursement from CN of TCI's out-of-pocket expenses, including
proxy solicitation expenses and legal fees, incurred in connection
with a successful reconstitution of the Board.
A registered shareholder of CN who has given a proxy may revoke
the proxy at any time prior to use by:
(a) depositing an
instrument or act in writing revoking the proxy, executed or, in
Quebec, signed by such registered
shareholder or by his, her or its personal representative
authorized in writing or by electronic signature or, if the
registered shareholder is a corporation, by an officer or attorney
thereof properly authorized, either: (i) at the registered office
of CN at any time up to and including the last business day
preceding the day of the Special Meeting or any postponement(s) or
adjournment(s) thereof, at 935, rue de La Gauchetière ouest,
Montréal, Québec, Canada, H3B 2M9;
or (ii) with the chairman of the Special Meeting prior to
commencement of the Special Meeting on the day of the Special
Meeting or any postponement(s) or adjournment(s) thereof; or
(b) revoking the proxy
in any other manner permitted by law.
A non-registered shareholder may revoke a form of proxy or VIF
given to an intermediary or Broadridge Investor Communications (or
any such other service company) at any time by submitting another
properly completed form of proxy or VIF, as the latest form of
proxy or VIF will automatically revoke any previous one already
submitted, or by written notice to the intermediary in accordance
with the instructions given to the non-registered shareholder by
its intermediary.
Based on information provided to TCI by each respective nominee,
none of TCI's nominees, nor any of their associates or affiliates,
has had any material interest, direct or indirect, in any
transaction since the commencement of CN's most recently completed
financial year or in any proposed transaction which has materially
affected or would materially affect CN or any of its
subsidiaries.
Based on information provided to TCI by each respective nominee,
none of TCI nor any member, partner, director or officer of TCI,
nor any of TCI's nominees, nor any associates or affiliates of the
foregoing, has any material interest, direct or indirect, by way of
beneficial ownership of securities or otherwise, in the matters
currently known to be acted upon at the Special Meeting, other than
in respect of TCI's ownership, control or direction of an aggregate
of 36,699,825 common shares of CN, and the removal of certain
incumbent directors and the election of the nominees as directors
of CN.
CN's registered office address is 935, rue de La Gauchetière
ouest, Montréal, Québec, Canada,
H3B 2M9. A copy of the Circular which contains the information
required in respect of each of TCI's nominees may be obtained on
CN's SEDAR profile at www.sedar.com.
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SOURCE TCI Fund Management Limited