Thursday is starting off as a very good day for Bill Ackman.
The head of hedge fund Pershing Square not only won a big victory on Canadian Pacific Railroad, but saw one of his old foes on another Canadian fight forced to surrender.
In 2006, two American hedge fund managers were fighting a nasty battle over Sears Canada .
On one side was Mr. Ackman, who had bought almost a fifth of the Canadian retailer, betting there was value there. On the other side, Eddie Lampert. At the time, Mr. Lampert was the more lionized of the two managers, having booked a couple of big years, and been the first hedge fund manager to earn a $1-billion (U.S.) in a single year.
Mr. Lampert was laying a big pile of chips on the retailing sector, and had taken control of Sears Holdings in the U.S. The parent company, doing Mr. Lampert's bidding, wanted to buy out the rest of Sears Canada and offered about $16.
Mr. Ackman led a group of dissidents that fought for more. The fight got ugly, fast. Sears Holdings was forced to talk down the value of Sears Canada, arguing that there was huge problems at the retailer, from shrinking margins to growing competition.
In the end, Mr. Ackman got to keep his stake. Four years later, he sold it to Mr. Lampert for $30 a share.
However, maybe Mr. Lampert should have paid a little more attention to the numbers his side was rolling out showing how much trouble Sears Canada was in, even as he tried to buy the company.
Sears Holdings is now basically giving up, spinning off much of its holdings of Sears Canada in what is spun as a move to allow both sides to focus on their own business. And Sears Canada stock? It's at $12 and falling.