SINCERELY, BILL: The Unsealed Emails Between Bill Ackman And The Chairman Of Canadian Pacific Railway

Bill Ackman

Activist investor Bill Ackman of Pershing Square Capital has been in a highly publicized battle with Canadian Pacific Railway’s management.

The whole saga includes rumours, accusations, and leaked letters.

In an effort to clear things up a little, Ackman decided to unseal private emails between himself and the CP chairman John Cleghorn.

They were forwarded to and published by Canada’s The Globe And Mail this morning.

Here’s an excerpt from one:


From: William A. Ackman

Sent: Wednesday, January 04, 2012 7:22 AM

To: John Cleghorn

Subject: War and Peace


I woke up early this morning thinking about my favourite Canadian railroad and it is causing me to become more interested in military history. We have had what the historians would likely call a border skirmish. It is not clear who fired the first shot, but a few people have been hurt, some egos have been bruised, and the arms dealers (the media) are calling for and attempting to gin up a fight. They of course sell more papers if a fight occurs so their motives are clear.

When a border skirmish takes place, sometimes it leads to full out war and other times, things die down, borders are redrawn and peace can remain in both lands.

The choices from here as I see them are (1) representatives from our side and your side sit down and work this out promptly. Working it out, in my view, is the quick addition to the board of two representatives from our side, and Hunter’s hiring as CEO. The second alternative is that we will be forced to launch a proxy contest for the upcoming annual meeting where we will seek to replace a greater number of the existing directors with extremely highly regarded business executives who share our belief that management and board change is necessary at CP.

In the proxy contest, as a first step, we will take the largest public hall you have available in Toronto and will make a presentation to shareholders and the public (which will be simulcast on the Internet) about management and board failure over the last 10 years at CP. We will examine management’s and the board’s track record and history in CP and in previous career experiences. Among other issues, we will go into detail on the real reasons behind Ed Harris’s departure and compare it with what the company said publicly at the time. While we will only do this in the most high-minded manner possible – we will not make any ad hominem attacks on anyone – the process is inherently an uncomfortable one for all parties involved. It is all also expensive in time and money and a distraction for management, particularly at a time when their focus is needed on operations (most importantly, when it is snowing or flooding).

This proxy contest will not go well for the board and Fred. The track record is very poor, shareholders are disgruntled, and we are offering an alternative with a legendary reputation. An analyst at Morgan Stanley, your advisor in this matter, is now writing of a “super-bull” case if Hunter is hired. I have attached a copy of the report to this email. We will win the election likely by a landslide vote. Don’t rely on my opinion on this, just ask your proxy advisors.

Based on yesterday and my not receiving a return call from you, the probability of war occurring has gone up meaningfully. War is not my preference and it has been extremely rare for us. We have had only two proxy contests in 25 or so active engagements with public companies over the last eight years.

War is also not inevitable.


Read the rest of this email and other emails at