Canadian Pacific has offered $27.2 billion in a cash-and-stock deal, compared with Canadian National's $29.6 billion offer.
"We did not seek a proxy fight, but without urgent action CN's operational and financial performance will continue to lag its peers under a board that lacks the right railroad experience and operational expertise," TCI's Hohn said in a statement on Monday.
TCI also reiterated its call to replace Canadian National Chief Executive Officer Jean-Jacques Ruest with former Union Pacific executive Jim Vena.
Canadian National said once it receives a requisition from TCI, which owns over 5% in the railroad operator, for a meeting of its shareholders, it will review it and comment further in due course.
TCI's nominees include: Gilbert Lamphere, chairman of freight rail company MidRail Corp; Allison Landry, an independent director with XPO Logistics; Rob Knight, former chief financial officer of railroad operator Union Pacific Corp; and Paul Miller, a former Canadian National executive.
The investment firm said last week it expected to nominate at least five new directors to Canadian National's board, which has 11 directors.
(Reporting by Akanksha Rana in Bengaluru; Editing by Shinjini Ganguli)