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New dawn at Canadian Pacific as board, management buckle in fight Add to ...

These are stories Report on Business is following Thursday, May 17, 2012. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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CP board buckles The board and management of Canadian Pacific Railway Ltd. buckled at the 11th hour today, heading off what was shaping up to be a humiliating defeat in a proxy battle in Calgary.

Fred Green is stepping down as chief executive officer, while several board members, including chairman John Cleghorn, said they would not stand for re-election, The Globe and Mail's Jacquie McNish reports.

"This decision was made after taking into account the views expressed by shareholders about the desire for board change," Canada's oldest railway said in a statement.

The dramatic turn of events came just hours before what would have been the climax of one of the greatest proxy battles ever waged in Canada.

One of the country's blue-chip boards was facing activist investor Bill Ackman of Pershing Square Capital Management, who has become the railway's biggest shareholder and has been pushing for massive change, including the replacement of Mr. Green with Hunter Harrison, the former chief of rival CN.

Mr. Ackman had won widespread support for his dissident slate of shareholders.

Imperial weighs refinery future Canada's Imperial Oil Ltd. is looking to sell its almost century-old Dartmouth refinery.

"We recognize the refinery’s long history of supplying customers in this region and we know that these jobs are important to the community," said chief executive officer Bruce March.

"We are grateful of the relationship we have built with the community, our customers, and suppliers, and we recognize the potential for uncertainty that this evaluation may create."

Imperial said it would put the refinery, and the associated supply terminals, on the auction block, while also considering simply converting it to a terminal.

Citing "signficant global competition" in the Atlantic region, it plans to decide by the first quarter of next year.

The refinery began operating in 1918. Its capacity is some 88,000 barrels a day, creating several products, including gasoline, diesel, jet fuel, home heating fuel.

The terminals are in the Nova Scotia centres of Dartmouth and Sydney, Corner Brook in Newfoundland and Labrador, Sept-Ilses, Quebec, and Cap aux Meules in the Magdalen Islands.

Sears cutting stake in Canada Sears Holdings Corp. may be on the verge of a retreat from Canada.

Sears said in a statement today it plans to spin off a huge chunk of stake in its publicly traded subsidiary, Sears Canada Inc. , reducing its ownership to about 51 per cent from 95 per cent.

After that, the parent company could sell even more.

Sears Canada has been a laggard. Just today, the parent reported that the Canadian operation's same-store sales, a key measure in the retail industry, slipped 6.3 per cent in the first quarter of the year.

"Holdings believes that the spin-off will permit each of Sears Canada and Holdings to focus on their respective businesses and allocate resources to best optimize returns on assets employed," the parent company said in a statement.

"Holdings also believes that the spin-off will provide investors with a more targeted investment opportunity by having equity in two separate public companies, allow investors to participate in a direct investment in Sears Canada, and provide stockholders with increased flexibility of choice in what assets and securities they hold."



Markets mixed Global markets are mixed so far this morning, with a disquiet among investors over Greece and Spain.

"The overall tone of the market remains negative this morning, as the focus remains squarely on Europe," said Robert Kavcic of BMO Nesbitt Burns.

"Spain successfully sold €2.49-billion euros of debt maturing in July 2015 (the maximum amount), but the yield came in at 4.88 per cent, up from 4.04 per cent," he said in a research note.

"Commodity prices are relatively stable, with WTI oil about flat at just below the $93 mark, while gold is up about $8 to $1,547. Note that gold has slid sharply since the latest round of European woes flared up, in contrast to last summer when gold rallied sharply - one reason is that the U.S. dollar has rallied since the start of May."

Tokyo's Nikkei gained 0.9 per cent, and Hong Kong's Hang Seng slipped 0.3 per cent.

In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were down by between 1 per cent and 1.4 per cent by about 8 a.m. ET.

Dow Jones industrial average and S&P 500 also slipped.

"Canadian equities might be better positioned than overnight European and Asian benchmarks partly because oil is flat and gold is up," said Derek Holt and Dov Zigler of Scotia Capital.



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