CSX Drops 2%

CSX is down 2% after the Wall Street Journal said the company is discussing a settlement with Hunter Harrison, the outgoing chief executive of Canadian Pacific Railway Ltd (CP), and activist investor Paul Hilal that could make Harrison CSX’s CEO. Harrison partnered with Hilal’s new fund, Mantle Ridge LP.

The talks center around Mantle Ridge’s request for more than three CSX board seats, but CSX is said to be unwilling to hand over that many seats, WSJ reported, citing people familiar with the matter.

The fund is acquiring a large stake in CSX with the hope of installing Harrison to improve the company’s performance, people familiar with the matter said last week.

Any push to quickly replace CSX CEO, Michael Ward, who plans to retire in 2019, would need to occur before the company’s Feb. 10 director nomination deadline. If the two sides fail to strike a deal, Hilal may be forced to nominate a slate of directors who can put Harrison in the CEO seat.

By Kristin Senesi