CSX Corp. rockets on reports activist investors targeting railroad operator

Shares in CSX Corp. rocketed following reports that rival railroad operator´s Canadian Pacific´s ex boss would team up with an activist investor to shake-up the company.

Canadian Pacific´s ex-chief, Hunter Harrison, who stepped down from his post in the previous session, told The Wall Street Journal - which first reported the news - he was completing an agreement to team up with fund manager Paul Hillal, who left Pershing Square Management in 2016.

Their aim was to push for Harrison to be given a senior position at CSX, according to the WSJ and Bloomberg.

Harrison had led two failed attempts to take over Canadian Pacific in 2014 and once again in 2016, after having been named to the top post at CP with the backing of Ackman in mid-2012.

During his time at CP, Harrison cut staff and ran faster trains, thus boosting the firm´s cash flows.

By leaving CP ahead of schedule Harrison had forfeit $89.0m in benefits, Bloomberg reported.

Hilal´s new fund, Mantle Ridge, had raised over $1bn to carry out a single transaction, according to a person familiar with the matter cited by the Journal.

As of 1403 GMT, shares in CSX were trading 18.90% higher to $43.87 and at fresh record highs, giving the firm a market capitalisation of $34.54bn.