Tuesday, June 10, 2008

Dealbook - CSX Grasping at Straws to End Battle - NYTimes.com

Yeah this one will definitely make it to class! Fighting a proxy vote, CSX management has turned it political. How? By making it a matter of national defense. Uh, yeah. And for good reason, you never know when the British (where the hedge funds are located) are going to launch a surprise attack to get the return of Fort Niagara.

A few highlights from the NY Times:

Dealbook - CSX Grasping at Straws to End Battle - NYTimes.com:
"CSX has managed to turn a proxy contest for 5 of 12 board seats (it is hardly a takeover, at least not yet) into a debate about national security.”"

"The column writes itself: CSX delayed its annual meeting — without first telling its shareholders — and then moved the meeting to a rail yard in the middle of nowhere...."

"Two of the six senators who sent the letter ....receiving $5,000 each this year....[the] chairwoman of the House subcommittee with jurisdiction over the rail industry, has been particularly vocal in trying to prevent TCI from getting on CSX’s board. She has received $38,750 since 1989, including $5,000 in the 2008 election cycle, from CSX....And CSX gave $25,000 to Edward Waters College, in Jacksonville, her alma mater. And then CSX’s chief executive, Michael J. Ward, personally donated another $1 million to Edward Waters College"
Yep. It will make class as a great example of how management can fight takeovers and proxy votes even if it hurts shareholders.

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