Pershing Square Completes Successful Proxy Contest Against Canadian Pacific Railway

At Canadian Pacific Railway Limited's annual meeting held on May 17, 2012, Pershing Square Capital Management, L.P. (“Pershing Square”) elected all seven of its nominees to CP's board following a lengthy high-profile proxy contest. Funds managed by Pershing Square began acquiring CP common shares in September 2011, eventually making an investment of approximately $1.4 billion that represents more than 14 per cent of the outstanding shares of CP, and makes Pershing Square CP's single largest shareholder.

In January 2012, following several weeks of engagement between the board and management of CP and representatives of Pershing Square, Pershing Square initiated a proxy contest to replace a minority of the board at CP's May 17 annual shareholders meeting.

The proxy contest was notable for a number of reasons, including for the use by both CP and Pershing Square of “universal” forms of proxy that gave shareholders the ability to choose from among all of the nominees for the board, regardless of whether they used management's form of proxy or Pershing Square's dissident proxy.

As a result of this, shareholders were not constrained by the forms of proxy in respect of which director nominees they could support.

Following days of negotiations, arrangements were made in the late evening before the shareholders meeting which paved the way for the departure of CP's CEO and five other board members, and the election of Pershing Square's nominees. Following the shareholders meeting, Stephen Tobias, one of Pershing Square's nominees, was appointed Interim CEO and the reconstituted board began the search for a new CEO which culminated five weeks later in the hiring of former Canadian National Railway CEO Hunter Harrison.

Pershing Square was represented internally by Roy Katzovicz, and externally in Canada by Davies Ward Phillips & Vineberg LLP, with a team that included Patricia Olasker, Alex Moore, Jennifer Longhurst and Andrew Cooley. Pershing Square was represented in the United States by Sullivan & Cromwell LLP, with a team that included Alan Sinsheimer and Ari Blaut, and by Kirkland & Ellis LLP with a team that included Stephen Fraidin and Richard Brand. Pershing Square's Alberta counsel was Burnet, Duckworth & Palmer LLP, with a team that included Dan McDonald, QC, and Andrew Sunter.

CP was represented internally by Paul Guthrie, Karen Fleming and Paul Bachand, and externally by Fasken Martineau DuMoulin LLP, with a team that included William Orr, Richard Steinberg, Aaron Atkinson, Brad Freelan, Daniel Fuke and Susan Newell (corporate/securities); Anthony Baldanza (regulatory) and Sam Rickett and Murray Braithwaite (litigation) and Paul, Weiss, Rifkind, Wharton & Garrison LLP, with a team that included Bob Schumer, Andrew Foley, Ted Maynard, Steve Williams, Gordon Cruess, Katie St Peters and Tak Furukawa (corporate) and Moses Silverman (litigation).

Hunter Harrison was represented by Chris Paliare and Andrew Lewis of Paliare Roland Rosenberg Rothstein LLP.