CSX urges shareholders to reject activist slate
NEW YORK, May 27 (Reuters) - Railroad CSX Corp (CSX.N) on Tuesday said it sent a letter to shareholders urging them to disregard a proxy card from hedge funds seeking to nominate a slate of directors and to instead re-elect the board.
The Children's Investment Fund Management, a hedge fund known as TCI, and another fund, 3G Capital Partners, are trying to get five directors onto the 12-member CSX board.
"The TCI Group tells you that it wants CSX to become the best railroad in America, while arguing to sell the company, choke it with excessive debt, freeze its expansion, alienate its customers and regulators, and lay off its workers," the company said in the letter.
TCI has said the railroad could achieve $2.2 billion in annual productivity gains within five years, more than the $400 million the company has targeted.
CSX sued the funds in March, contending they broke securities laws aimed at preventing investor groups from secretly coordinating their efforts because they did not properly disclose their holdings in the company.
CSX wants the court to block the funds from nominating the slate, bar them from voting some of their shares and force them to sell part of their CSX stake.
In counterclaims, the funds accuse CSX of illegally enriching corporate directors and engaging in bad faith discussions with them.
A decision from U.S. District Judge Lewis Kaplan is expected before CSX's annual meeting on June 25. (Reporting by Helen Chernikoff, editing by Maureen Bavdek)
