CSX files suit against investors, changes company meeting date, ups dividend

By Lisa Kerner

Charlotte, N.C., March 17 - CSX Corp. filed a federal lawsuit against the Children's Investment Fund (TCI) and 3G Capital Partners alleging violations of federal securities laws, the company announced on Monday.

The hedge funds had formed a group to nominate a slate of directors to stand for election at the 2008 CSX annual meeting, according to a company news release.

CSX claims in the lawsuit that TCI has employed swap agreements in order to evade the filing requirements of Section 13(d).

In addition, according to CSX, TCI and 3G's disclosures concerning their formation of a Section 13(d) group are false and misleading.

CSX, concerned about the effects of the possible violations, changed the date of its 2008 annual meeting to June 25. The record date of the meeting is April 21, according to a company news release.

The lawsuit was filed in the U.S. District Court for the Southern District of New York.

In February, TCI disagreed with CSX's bylaw changes that limited shareholders' ability to request that the board call a special meeting of shareholders, it was previously reported.

Presiding director of the CSX board Edward J. Kelly, III said TCI is seeking control of the company's board and wants to dictate CSX's strategy, according to a CSX news release.

"We filed this suit against TCI and 3G to ensure that all of our shareholders receive complete and accurate information about the group's holdings, agreements, plans and motivations to which they are entitled under federal securities laws," CSX chairman, president and chief executive director Michael Ward added.

CSX also announced that in order to deliver additional value to its shareholders, the company was targeting a $3 billion share buyback by 2009.

The board has authorized additional share purchases of some $2.4 billion on top of the existing $600 million remaining under the current program.

CSX, a Jacksonville, Fla.-based railroad and transportation company, also upped its quarterly dividend by 20% to $0.18 per share, nearly tripling the quarterly dividend over the last two years.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.