RTR: Ancora-led group takes $1bn stake in Norfolk Southern

Diane Picard

REUTERS reports:

An Ancora Holdings-led investor group has taken a roughly $1 billion stake in Norfolk Southern (NSC.N), opens new tab and nominated a majority slate of directors to the railroad operator’s board in a bid to oust CEO Alan Shaw, the Wall Street Journal reported.

The director slate includes former Ohio Governor John Kasich and Sameh Fahmy, who was an executive at railroad operator Kansas City Southern, the report said on Wednesday, citing people familiar with the matter.

In the past few weeks, Norfolk Southern – among the top-five largest railroad operators in North America by revenue – has met with the group and the group’s director nominees have raised a number of issues including how the firm handled a train derailment last year and what they view as Shaw’s failure to hit operating targets, the report added…

The full post is here.

Seeking Alpha wrote today that Norfolk Southern “may see ‘material upside’ after a report that an activist investor group has built a $1 billion stake in the railroad operator and is pushing for the ouster of CEO Alan Shaw. Norfolk Southern rose 5.6%.”

It added that Barclays analyst Brandon Oglenski, who has an equal weight rating on NSC, wrote today: 

“Activism at Norfolk Southern could yield considerable earnings upside with a revamped, operations-focused culture; but finding the right leadership will be critical to unlocking long-term value for shareholders.”