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CSX (CSX) on Friday pushed back a deadline for shareholders to nominate dissident director candidates until Feb. 24 in a move suggesting that a newbie activist fund is still in talks with the railroad over a possible board overhaul.
The delay comes after officials from the Jacksonville, Fla.-based CSX reportedly met recently with veteran railroad executive Hunter Harrison and representatives from newbie activist Mantle Ridge over the insurgent fund's push for more than three seats on the company's board.
A report Friday suggested that Harrison and CSX have discussed setting up a three-year contract for Harrison to head the railroad but that an agreement hasn't been reached as Mantle Ridge is pushing for more board control.
Harrison stepped down as CEO of Canadian Pacific (CP) in January to join Mantle Ridge's efforts to shake up CSX.
A Wall Street Journal report said that while CSX, which was represented at the meeting by board members Edward Kelly and David Ratcliffe, is open to a compromise, it is reluctant to surrender that many board seats. The two sides had been trying to reach an agreement before a deadline originally set for Friday for investors to nominate directors. However, the move to postpone the deadline by two weeks indicates that both sides are still in talks.
CSX's share price spiked significantly last month on news of the insurgency campaign, with investors hopeful that Harrison would have success streamlining the railroad and making it more efficient. The exec was brought to Canadian Pacific by activist Bill Ackman's Pershing Square Capital Management in 2012 and orchestrated a turnaround there that led to CP's Toronto-based shares climbing nearly 190% during his tenure.
CSX shares were up about 1.4% to $48.40 a share in afternoon trading on Friday on the news that negotiations were likely continuing.
Harrison joined ex-Pershing Square partner Paul Hilal last month to form Mantle Ridge. Hilal was the Pershing partner who largely engineered the spectacularly successful CP insurgency.