Melinda French Gates ‘no longer beneficial owner of more than 10%’ of CN common shares

melinda-french-gates-‘no-longer-beneficial-owner-of-more-than-10%’-of-cn-common-shares

Philanthropist and one of the railway’s top shareholders gives over 2 million shares to charity

Melinda French Gates has given some of her shares in Canadian National Railway Co. to charity. Photo by Lise Aserud/NTB Scanpix/via REUTERS/File Photo Melinda French Gates, who became one of the largest single shareholders of Canadian National Railway Co. following her 2021 split from husband and Microsoft Corp. founder Bill Gates, has disposed of enough shares that she will no longer have to report her holdings.

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In a statement late Tuesday, French Gates said that since her last report, she “is no longer the beneficial owner of more than 10 per cent” of CN’s outstanding common shares, the threshold that requires insider reports to be filed with regulators whenever shares are bought or sold.

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She explained that since her last insider report she made a gift of 2,435,000 shares of the Montreal-based railway to a private charity of which she is the sole director — and that the charity has disposed of 1,858,426 shares in open market transactions.

French Gates now directly owns 12,893,169 common shares. In addition, she is deemed to beneficially own 576,574 shares owned by the private charity and 54,826,786 shares held by the Bill & Melinda Foundation Trust. In aggregate, these holdings total 68,296,529 shares, or 9.99 per cent of the issued and outstanding common shares, according to Tuesday’s statement.

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In May of 2021, shortly after news of the couple’s split rippled through corporate and society circles, Bill Gates transferred more than 14 million shares of CN to his wife of 27 years as they prepared to go their separate ways.

It put her among CN’s top 10 shareholders, and was described in a regulatory filing as “a private transaction, for no consideration.” The two per cent stake in the company was worth more than $1.8 billion, based on CN’s share price at the time, and her individual holdings in CN exceeded stakes held by major Canadian institutional investors including TD Asset Management Inc., the Caisse de dépôt et placement du Québec, and Jarislowsky Fraser Ltd., according to Nasdaq.

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Article content French Gates was deemed the beneficial owner of additional shares as a co-trustee of the Bill & Melinda Foundation Trust. That beneficial ownership was boosted substantially in July 2022 when Bill Gates gifted the foundation trust with 44,548,156 CN common shares as part of a $20-billion pledge, pushing her aggregate holdings to 10.1 per cent.

Gates had been accumulating shares in CN for at least a decade and a half through his private investment vehicle Cascade. Some speculated that his interest in the railway was linked to his friendship with Warren Buffett, who, along with his firm Berkshire Hathaway Inc., had been bullish on the sector for years. At one point, Cascade owned roughly 13 per cent of CN, but has been reducing that stake since at least the spring of 2021, according to a Bloomberg News report in May of this year.

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