Canadian National railroad facing more investor pressure

OMAHA, Neb. (AP) — A day after being spurned by Kansas City Southern, Canadian National railroad is facing additional pressure from a major investor who wants CN to abandon its effort to buy the U.S. railroad.

The London-based investment firm TCI Fund — which owns about 5% of CN's stock and about 8% of rival Canadian Pacific's shares — said Monday that it is calling for a special CN shareholder meeting where it plans to nominate four new directors. TCI has said it thinks CN should overhaul its board, get a new CEO and refocus its efforts on improving its own operations.

“History has shown that with the right leadership railroads can be improved quickly. TCI’s independent and highly skilled nominees, if elected, will help lead and guide the selection of a new CEO," said Chris Hohn, TCI founder and managing partner.

TCI has said that a former CN executive who also served as Union Pacific’s head of operations for several years, Jim Vena, should be named CN’s next CEO.

Currently, CN is led by JJ Ruest, who has been president and chief executive since July 2018. Ruest has been with the railroad since 1996.

Canadian National officials did not immediately respond Monday to TCI's call for a special meeting, but the railroad said Sunday that it would evaluate all of its strategic options after Kansas City Southern picked Canadian Pacific's $31 billion offer over CN's higher bid.

Canadian National had bid $33.6 billion to acquire Kansas City Southern but regulators rejected a key part of its plan last month. Under the terms of its merger agreement with KCS, CN still has five business days to respond and possibly sweeten its offer.

But Canadian National's bid became less attractive after the Surface Transportation Board said last month that it wouldn't be able use a voting...