Investor group plans proxy fight, CEO ouster at Norfolk Southern – WSJ (NYSE:NSC)

Norfolk Southern (NYSE:NSC) +5.3% post-market Wednesday following a Wall Street Journal report that an investor group led by Ancora Holdings has built a ~$1B stake in the railroad and nominated a majority slate of directors to the company’s board in an attempt to oust CEO Alan Shaw.

Norfolk Southern (NSC) reportedly has met with the Ancora-led group in recent weeks, and the group’s board nominees are said to have addressed a number of issues including how the company handled last year’s big train derailment in Ohio and what they see as Shaw’s failure to hit operating targets.

Hedge funds Sachem Head Capital Management and D.E. Shaw also recently began building their own stakes in Norfolk Southern (NSC), according to the report, although the size of those positions could not be determined.

The company’s Q4 results last week showed a 19% decline in earnings and a 5% drop in revenues compared with year-earlier levels, as railroads struggle with declining demand from lumber and coal suppliers, among others.