(Adds source based info on new purpose of special meeting)
By Michael Flaherty
March 3 CSX Corp is nearing a deal with
one of its largest investors, activist hedge fund Mantle Ridge
LP, to sign up veteran railroad executive Hunter Harrison as the
U.S. railroad company's CEO, people familiar with the matter
said on Friday.
Talks between CSX's board and Mantle Ridge have been
advancing, the people said, getting closer to a deal that could
be announced as early as next week. Final details, however, are
still being worked out, and the talks may end unsuccessfully,
the people added.
The sources asked not to be identified because the
negotiations are confidential. CSX, Mantle Ridge and Harrison
all declined to comment.
CSX and Mantle Ridge have been locked in a battle over
Harrison's contract as well as the investor's intent on shaking
up the company's board.
Mantle Ridge owns 4.9 percent of the company, according to a
letter the firm published last month.
CSX announced last month that CEO Michael Ward was stepping
down, effective on May 31. CSX's stock has surged more than 30
percent since January, when news first appeared that Harrison
was planning to leave his CEO slot at Canadian Pacific to seek
the top job at CSX.
Harrison,72, would become CEO under a four-year contract,
Bloomberg News reported earlier on Friday - which would mark a
victory for Mantle Ridge, whose founder Paul Hilal had argued
that the company's preference of a two-year deal was not long
CSX has called for a special meeting for shareholders to
vote on Harrison's proposed compensation package and for the
board seats that Mantle Ridge is seeking.
CSX plans to still hold a special meeting but only for
shareholders to vote on who will ultimately pay for the roughly
$90 million that Harrison walked away from when he left Canadian
Pacific early, one of the people familiar with the matter told
(Reporting by Michael Flaherty in New York, editing by G Crosse
and Diane Craft)