Will Canadian Pacific sell DM&E?
It has been long time since DM&E - the one-time nemesis of Mayo Clinic and the City of Rochester - has been in the news.
So I couldn't resist posting this. Evidently, a guy trying to engineer the future of Canadian Pacific railroad thinks buying DM&E was a "blunder" and CP should dump the pathway into the Powder River Basin's treasure chest of coal.
Here's is some from a Bloomberg News article by Frederic Tomesco and Natalie Doss:
Dakota, Minnesota & Eastern Railroad Corp. cost more than it was worth, Ackman said yesterday in an interview after urging Canadian Pacific shareholders to back Hunter Harrison, his choice to be chief executive officer. Ackman's Pershing Square Capital Management LP is Canadian Pacific's biggest investor.
Ackman cited the DM&E deal as an example of poor decision making that he said would be remedied by ousting CEO Fred Green and hiring Harrison, the retired chief of Canadian National Railway Co.
Calgary-based Canadian Pacific targeted the DM&E to expand access to U.S. Midwest ethanol and coal markets.
The railroad agreed to buy Sioux Falls, South Dakota-based DM&E in 2007 and won U.S. approval for the transaction the following year. Before the purchase, closely held DM&E had planned to spend $6 billion on a new line into Wyoming's Powder River Basin, where U.S. carriers Union Pacific Corp. and Burlington Northern Santa Fe load coal from the area's mines.