CN Announces Special Meeting of Shareholders on March 22, 2022

Rail Transportation

CN (TSX: CNR, NYSE: CNI) today announced that it has scheduled a Special Meeting of Shareholders (the “Special Meeting”) in response to a requisition by CIFF Capital and TCI (collectively “TCI”). The Special Meeting is scheduled to be held at 9:00 a.m. Eastern Time on Tuesday, March 22, 2022. TCI and CN have mutually agreed to the date of the Special Meeting.

CN remains committed to executing its ambitious, long-term, sustainable growth strategy, and is grateful for early expressions of support for this plan that it has received from valued shareholders, customers, partners and other key stakeholders. The Company has best-in-class corporate governance and a strong shareholder engagement program as it continues to focus on operational excellence, a customer-first culture, innovation and ESG leadership. CN’s strategic plan follows a year of significant governance enhancements including the addition of three new independent directors and achieving gender parity among independent directors ahead of plan. At the Company’s most recent Annual General Meeting (“AGM”), all directors received greater than 95% of votes in favour, and CN’s say-on-pay resolution passed with 97.7% support.

TCI’s motives for its requisition are dubious.

  • TCI is a dissident shareholder that only recently acquired a 5% stake in CN and is seeking to assert effective control over one of Canada’s largest and most economically important companies. It is doing so without presenting a credible plan to create superior or sustainable value.
  • TCI holds an 8.3% stake in Canadian Pacific (“CP”), meaning TCI is the largest shareholder in CN’s direct competitor and Canada’s second largest Class 1 railroad. TCI’s actions over the last several months demonstrate that there is a clear conflict between their interests and those of CN’s other shareholders.
  • Curiously, TCI continues to argue that CN’s pursuit of Kansas City Southern (“KCS”) was bad for CN. The facts are clear: CN’s bid for KCS was a strategic move that resulted in significant benefits for CN’s shareholders and stakeholders, including an incremental US$700 million in fees paid to CN. While the pursuit of KCS was demonstrably positive for CN, it has been costly and may yet be problematic for CP and its largest shareholder.
  • As recently as CN’s AGM in April 2021, by all accounts it appears that TCI voted in favour of all resolutions, including director nominees, say-on-pay and the Climate Action Plan. It was only after CN disrupted TCI’s and CP’s plans for KCS with a revised bid that TCI increased its stake in CN and began attacking the company publicly to try to force its own agenda.

The proxy contest initiated by TCI is misguided, costly and not in the best interest of CN’s shareholders or its other stakeholders.

About CN
CN is a world-class transportation leader and trade-enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. As the only railroad connecting Canada’s Eastern and Western coasts with the U.S. South through a 19,500-mile rail network, CN, and its affiliates have been contributing to community prosperity and sustainable trade since 1919. CN is committed to programs supporting social responsibility and environmental stewardship.

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