CALGARY, AB, Jan. 27, 2021 /CNW/ - Canadian Pacific Railway
Limited (TSX: CP) (NYSE: CP) today announced its Board of Directors
will seek shareholder and regulatory approval for the
implementation of a five-for-one share split of CP's issued
and outstanding common shares. The share split is subject to the
approval of shareholders at the Annual and Special Meeting of
Shareholders scheduled to be held on April
21, 2021 and to the requirements of the Toronto Stock
Exchange ("TSX") and New York Stock Exchange ("NYSE").
"CP's share price has increased in value by 150 percent in the
past five years," said Keith Creel,
CP President and Chief Executive Officer. "We believe that the
share split will encourage greater liquidity for CP's common shares
and provide opportunities for ownership by a wider group of
investors than is currently available."
If approved by shareholders and stock exchanges and implemented
by the Board of Directors, shareholders will be entitled to four
additional common shares for each common share held at a date to be
approved by the Board of Directors following shareholder
approval.
The April 26, 2021 dividend
payment announced on January 26, 2021
will not be affected by the proposed five-for-one share split. If
the share split receives shareholder and regulatory approval and is
implemented by the Board of Directors, all subsequent dividends
approved by CP's Board of Directors are expected to reflect the
five-for-one share split.
CP also today announced that the TSX has accepted its notice to
implement a normal course issuer bid ("NCIB") to purchase, for
cancellation, up to 3,331,921 common shares or approximately 2.5
percent of CP's common shares issued and outstanding as at
January 15, 2021. The NCIB is
scheduled to commence on January 29,
2021 and is due to terminate on January 28, 2022.
"CP's ability to generate strong free cash flow and the pipeline
of opportunities in front of us give us the confidence to launch
this new share buyback program," said Creel. "We remain committed
to returning cash to shareholders in a disciplined, opportunistic
manner."
Purchases of CP common shares under the NCIB may be made through
the facilities of the TSX, the NYSE and alternative trading systems
by means of open market transactions or by such other means as may
be permitted by the TSX and under applicable securities laws,
including private agreements or share repurchase programs pursuant
to issuer bid exemption orders issued by applicable securities
regulatory authorities. The price CP will pay for any common shares
will be the market price at the time of purchase or such other
price as may be permitted by the TSX. Any purchase made under an
exemption order issued by a securities regulatory authority will
generally be at a discount to the prevailing market price.
In connection with the NCIB, CP will enter into an automatic
purchase plan ("Plan") with its designated broker to allow for
purchases of its common shares during internal quarterly blackout
periods. Such purchases would be at the discretion of the broker
based on parameters established by CP prior to any blackout period.
Outside of these periods, common shares will be purchased in
accordance with management's discretion, subject to applicable law.
The Plan has been reviewed by the TSX and may be terminated by CP
or its broker in accordance with its terms, or will terminate on
the expiry of the NCIB.
As of January 15, 2021, CP had
133,276,879 common shares issued and outstanding. CP will not
acquire through the facilities of the TSX more than 73,788 common
shares during a trading day, being 25 percent of the average daily
trading volume of CP common shares on the TSX for the six calendar
months prior to the date of approval of the bid by the TSX and, in
addition, will not acquire per day on the NYSE more than 25 percent
of the average daily trading volume for the four calendar weeks
preceding the date of purchase, subject to, in both cases, certain
exceptions for block purchases.
The actual number of common shares that will be repurchased
under the NCIB, and the timing of any such purchases, will be
determined by CP, subject to the limits imposed by the TSX. There
cannot be any assurances as to how many common shares, if any, will
ultimately be acquired by CP. If the share split receives
shareholder and regulatory approval and is implemented by the Board
of Directors, adjustments will be made to the number of shares that
CP may purchase under the NCIB to reflect the five-for-one share
split.
CP believes that the purchase of its shares from time to time is
an appropriate and advantageous use of its funds.
Under CP's previous NCIB that commenced on December 20, 2019 and expired on December 19, 2020, CP obtained approval from the
TSX to purchase up to 4,800,862 of its common shares for
cancellation. CP purchased 4,271,485 of its common shares through
open market transactions on the TSX, the NYSE, and alternative
trading systems at a weighted average price of $369.06.
In total, CP has repurchased approximately 45.3 million of its
common shares since 2014.
Note on forward-looking information
This news release contains certain forward-looking information
and forward-looking statements (collectively, "forward-looking
information") within the meaning of applicable securities laws.
Forward-looking information includes, but is not limited to,
statements concerning expectations, beliefs, plans, goals,
objectives, assumptions and statements about possible future
events, conditions, and results of operations or performance.
Forward-looking information may contain statements with words or
headings such as "will", "anticipate", "believe", "expect", "plan",
"should" or similar words suggesting future outcomes.
This news release contains forward-looking information relating,
but not limited to, the timing of the Annual and Special Meeting of
Shareholders, the anticipated impact of a five-for-one share split
on CP's common shares, future dividend payments, potential future
purchases of CP common shares under the normal course issuer bid,
our operations, priorities and plans, the impacts of COVID-19 on
CP's business, our growth prospects and anticipated cash flow
generation and potential increase to liquidity.
The forward-looking information contained in this news release
is based on current expectations, estimates, projections and
assumptions, having regard to CP's experience and its perception of
historical trends, and includes, but is not limited to,
expectations, estimates, projections and assumptions relating to:
North American and global economic growth; commodity demand growth;
agricultural production; commodity prices and interest rates;
performance of our assets and equipment; sufficiency of our
budgeted capital expenditures in carrying out our business plan;
our ability to complete our capital and maintenance projects on the
timelines anticipated; applicable laws, regulations and government
policies; the availability and cost of labour, services and
infrastructure; the satisfaction by third parties of their
obligations to CP; the anticipated impacts of the novel strain of
coronavirus (and the disease known as COVID-19); and capital
investments by third parties. Although CP believes the
expectations, estimates, projections and assumptions reflected in
the forward-looking information presented herein are reasonable as
of the date hereof, there can be no assurance that they will prove
to be correct. Current conditions, economic and otherwise, render
assumptions, although reasonable when made, subject to greater
uncertainty.
Undue reliance should not be placed on forward-looking
information as actual results may differ materially from those
expressed or implied by forward-looking information. By its nature,
CP's forward-looking information involves inherent risks and
uncertainties that could cause actual results to differ materially
from the forward -looking information, including, but not limited
to, the following factors: risks associated with the ability of CP
to obtain the required shareholder and regulatory approvals to
complete the share split; changes in business strategies; general
North American and global economic, credit and business conditions;
risks associated with agricultural production, such as weather
conditions and insect populations; the availability and price of
energy commodities; the effects of competition and pricing
pressures; industry capacity; shifts in market demand; changes in
commodity prices; uncertainty surrounding timing and volumes of
commodities being shipped via CP; inflation; changes in laws,
regulations and government policies, including regulation of rates;
changes in taxes and tax rates; potential increases in maintenance
and operating costs; changes in fuel prices; uncertainties of
investigations, proceedings or other types of claims and
litigation; labour disputes; risks and liabilities arising from
derailments; transportation of dangerous goods; timing of
completion of capital and maintenance projects; currency and
interest rate fluctuations; trade restrictions or other changes to
international trade arrangements; climate change; various events
that could disrupt operations, including severe weather, such as
droughts, floods, avalanches and earthquakes, and cybersecurity
attacks, as well as security threats and governmental response to
them, and technological changes; and the pandemic created by the
outbreak of the novel strain of coronavirus (and the disease known
as COVID-19) and resulting effects on economic conditions, the
demand environment for logistics requirements and energy prices,
restrictions imposed by public health authorities or governments,
fiscal and monetary policy responses by governments and financial
institutions, and disruptions to global supply chains. The
foregoing list of factors is not exhaustive. These and other
factors are detailed from time to time in reports filed by CP with
securities regulators in Canada
and the United States. Reference
should be made to "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -
Forward-Looking Statements" in CP's annual and interim reports on
Form 10-K and 10-Q.
The forward-looking information contained in this news release
is made as of the date hereof. Except as required by law, CP
undertakes no obligation to update publicly or otherwise revise any
forward-looking information, or the foregoing assumptions and risks
affecting such forward-looking information, whether as a result of
new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific is a transcontinental railway in Canada and the
United States with direct links to major ports on the west
and east coasts. CP provides North American customers a competitive
rail service with access to key markets in every corner of the
globe. CP is growing with its customers, offering a suite of
freight transportation services, logistics solutions and supply
chain expertise. Visit cpr.ca to see the rail advantages of CP.
CP-IR
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SOURCE Canadian Pacific