[220117.EN.BIZ] Talk of Hunter Harrison CSX Takeover Sends Stock Up to 5-year High

TALK of former Canadian Pacific Railway (CP) CEO Hunter Harrison's takeover of Jacksonville-based CSX railroad had the US company's stock soar 23.4 per cent to close at US$45.51 - a five-year high.

"With Harrison's protege and current chief operating officer Keith Creel taking the reigns at CP, some have posited that a merger between CP and CSX could be in cards should Harrison be installed at CSX," reported American Shipper.

Reports came as CP announced Harrison would retire effective immediately, nearly six months ahead of the previously announced schedule, causing him to forfeit benefits and equity awards totalling US$88.6 million. According to anonymous sources quoted by the Wall Street Journal, Mr Harrison's early exit is all part of a plan to team up with activist investor Paul Hilal and pursue a leadership position with CSX.

Mr Hilal knows Mr Harrison, previously when he was CEO of CP's rival the Canadian National Railway, from his time at billionaire Bill Ackman's Pershing Square Capital Management, which won a proxy fight to install Mr Harrison as CEO at CP in 2012.

Mr Harrison has long advocated consolidation of North Americans railways, and analysts have already begun to speculate as to his intentions with CSX.

Under Mr Harrison, CP made an unsuccessful hostile bid to take over Norfolk Southern, the fourth biggest railway in the States.

Source : HKSG.