Trucks cross the Ambassador Bridge from Windsor, Ont. into Detroit on June 12, 2018.Paul Sancya/The Associated Press
Canadian trucking company TFI International Inc. TFII-T has reversed plans to move its headquarters south after pressure from investors.
Less than a week after announcing that it intends to pursue redomiciliation and change the country where it is legally incorporated to the United States, the Montreal-based freight operator said in a statement Monday that it is dropping that effort. It said it made the decision “based on feedback from shareholders,” but gave no further details.
TFI chief executive Alain Bédard had said he wants to better align the company with its commercial presence and shareholder base, and that a move would allow TFI to be part of U.S. stock indexes. About 70 per cent of the company’s operations are currently in the U.S., together with just under half of its investors.
However, the proposal did not sit well with at least one major shareholder. Pension-fund manager Caisse de dépôt et placement du Québec, which owns a stake of about 4 per cent in TFI, had vowed to push back.
“We expressed our dissatisfaction” to the company, Caisse spokeswoman Kate Monfette said in an e-mail Monday.
That appears to have contributed to Mr. Bédard’s change of heart. The CEO did not immediately respond to a request for comment.
“Their decision to move wasn’t well received – in a number of circles in Quebec,” said Louis Hébert, a corporate-strategy specialist at Montreal’s HEC business school, adding he believes Mr. Bédard likely also received calls from the province’s political leaders.
“The arguments they made for moving the headquarters weren’t entirely clear, which necessarily raised some questions,” Prof. Hébert said. “And the current context has changed.”
A looming trade war between Canada and the U.S. has Canadian business and political leaders on edge and has heightened sensitivity about the economy and employment. U.S. President Donald Trump is keen on imposing tariffs on imports as a way to force manufacturers and other companies based outside his country to move there and earn access to the world’s biggest consumer market. He’s also promising some of the lowest corporate tax rates on the planet.
In a call with analysts last week, Mr. Bédard expressed a positive view of the Trump White House, saying: “I feel really good about this U.S. economy and I feel really that those guys will do a great job – the new administration. So to me, it’s time to invest in the U.S.”
TFI’s reversal was likely connected to the heightened nationalism on the Canadian side of the border with the ongoing threats by Mr. Trump, said Peter Stefanovich, president of Left Lane Associates, a transportation, logistics and supply chain investment bank focused on the North American freight market. He said there could be a fallout on TFI from Canadian shippers, carriers and partners alike.
“I don’t think people will forget quickly,” said Mr. Stefanovich.
Earlier this month, Barrick Gold Corp. ABX-T said it is also considering redomiciling to the U.S. from Canada and that, under the Trump administration, it could happen sooner rather than later. Chief executive Mark Bristow told The Globe and Mail’s editorial board that the move would make sense for multiple reasons, including access to a more efficient marketplace and the ability to attract a bigger pool of shareholders.
Numerous analysts have predicted that TFI would be one of the big Canadian winners under the new Trump administration. Pro-growth government policies that spur capital investment would be positive for the U.S. trucking market and U.S.-focused trucking companies, notably TFI International as well as the U.S. operations of Andlauer Healthcare Group Inc., according to National Bank.