CANADIAN PACIFIC TO SPIN OFF CP SHIPS, CP RAILWAY

CANADIAN PACIFIC TO SPIN OFF CP SHIPS, CP RAILWAY    Canadian Pacific, the profitable Canadian conglomerate that owns CP Ships and CP Railway, announced on Tuesday that it will spin off all of its businesses into separate companies, each with its own stock market listing.
   CP aims to turn its businesses — CP Ships, CP Railway, Fording and PanCanadian Petroleum and hotels — into separate public companies.
      Under the plan, Canadian Pacific shareholders will receive common shares in each of the public companies. CP as a group will disappear.
      The reorganization is designed to maximize value for Canadian Pacific shareholders by unlocking the current value of CP’s businesses and by “strengthening their ability to pursue even greater success as independent public companies,” a spokesman for CP said.
   Under the proposed reorganization, CP intends to distribute its approximately 86-percent investment in PanCanadian Petroleum and its 100-percent interest in each of Canadian Pacific Railway, CP Ships, and Fording to holders of CP’s common shares.    It is currently envisioned that after the distribution, Canadian Pacific Hotels will be the only significant business of CP.
   David P. O’Brien, chairman, president and chief executive officer of CP, said that the reorganization “will better equip each business to pursue even greater success by providing them with direct access to public equity markets and shares that can be used as acquisition currency and incentive compensation.”
   “It will also allow the management of each company to evaluate its growth opportunities and organize its capital structure according to its own industry,” he added.
   For employees, customers, suppliers and other business partners, it will be “business as usual” during the process, CP said.
   CP expects to complete the reorganization in about October. The plan is subject to shareholder and court approvals, other requisite consents and a favourable Canadian advance tax ruling or opinion, as may be required.
   “We are indeed ready for an independent life, relish the challenges and opportunities that being a publicly-quoted company brings and look forward to growing further from our position of strength,” said Ray Miles, chief executive officer of CP Ships.