Activist Ancora Brings Scars from Freight Campaigns to Norfolk Southern Proxy Fight

Datatime： 2024/3/11 14:57:33 Hits： 88

Activist investor Ancora Holdings is deploying a playbook in its proxy battle at

Norfolk Southern

honed during other freight-sector campaigns, in particular its failed push to streamline the nation’s largest freight broker,

C.H. Robinson Worldwide

The firm’s demands for a management overhaul and control of Norfolk Southern’s board are “almost certainly informed by not getting exactly what they wanted at C.H. Robinson,” said Bascome Majors, an equity analyst at Susquehanna International Group.

An Ancora-led group has built a roughly $1 billion stake in Norfolk Southern and is pushing a majority slate of eight candidates for the 13-member board and to replace the company’s chief executive and chief operating officer.

The Cleveland-based firm has over the past two decades mostly launched campaigns across industrials and materials sectors, targeting companies including the owner of used equipment auctioneer

Ritchie Brothers

. It has also mounted campaigns at big retailers such as Bed Bath & Beyond and Kohl’s.

Ancora began to target freight transportation in 2018 when it launched a campaign at Toronto-based

Element Fleet Management

, one of the world’s largest vehicle leasing and services companies.

Its campaigns since then aimed at the freight companies, a sector usually marked by conservative, utility-like investment strategies, have had varying degrees of success.

Ancora pushed niche trucker

Forward Air

to refocus on its core business of quickly moving freight between airports by truck, helping boost the company’s margins and almost doubling its share price during the period Ancora held a position there.

An Ancora-led group has built a roughly $1 billion stake in Norfolk Southern and is pushing a majority slate of eight candidates for the 13-member board. PHOTO: GENE J. PUSKAR/ASSOCIATED PRESS

It took a second run at the company in the fall of 2023, seeking to block Forward Air’s $3.2 billion deal to acquire freight forwarder Omni Logistics. Forward Air’s share price sank on news of the acquisition and its own executives tried to pull out, but Omni forced through the acquisition with the help of a Tennessee court. The trucker’s shares remain down nearly 70% from their high last August.

At C.H. Robinson, Ancora succeeded in placing two representatives on the board and in last year forcing out CEO Bob Biesterfeld. But its push to install Jim Barber, a former chief operating officer at

United Parcel Service

, as a replacement CEO and for C.H. Robinson to sell off its global forwarding unit failed. The Eden Prairie, Minn.-based company’s share price has fallen about 25% over the past year to about $74.

“We are not walking around patting ourselves on the back about C.H. Robinson,” said Jim Chadwick, president of Ancora subsidiary Ancora Alternatives.

Chadwick said the measure of success in activist efforts “ultimately for me, it is share price. That’s the only thing our investors care about.” He said Ancora almost doubled its money on the first campaign at Forward Air, but its second foray at the company wasn’t profitable.