Canadian Pacific Ltd., the rail-energy-hotel conglomerate, said Tuesday it intends to divide the firm into five separate companies, all of which will be publicly traded. The company plans to keep Canadian Pacific Hotels as its only significant business.

The move has been anticipated for more than three weeks. Canadian Pacific says it hopes the reorganization will unlock the current value of Canadian Pacific's businesses and provide them with direct access to public equity markets, allowing each of them to pursue their own acquisitions, the company said in a release.

As well, the investment community will be able to more easily follow and accurately value these industry leaders on a stand-alone basis against competitors, benchmarks and performance criteria specific to each business sector, CP added.

Calgary-based Canadian Pacific owns the Canadian Pacific Railway; CP Ships, a container shipping company; Fording, a producer of metallurgical coal; and Canadian Pacific Hotels, the largest luxury hotel operator in North America. It also has an 86 per cent holding in PanCanadian Petroleum, which produces and markets crude oil and natural gas.

Canadian Pacific added it's willing to adjust the plan in response to market conditions as the process unfolds.

Canadian Pacific and all of its companies will continue to conduct business in the normal manner during this period, honouring all existing business relationships, commitments and obligations, said David O'Brien, chairman and chief executive.

O'Brien also announced he will step down after the big restructuring.

I'm going to ride off into the sunset, he said. It's not my intention to be a lead actor in any of the five companies, he said in a conference call with analysts after the announcement.

In 2000, Canadian Pacific Ltd. produced cash flow of $3.92 billion and net income of $1.76 billion. It reported year 2000 operating income of $845 million.

The breakup is subject to shareholder and court approvals, both in Canada and the United States. Canadian Pacific expects to complete the transaction by the fall of 2001.

CP's shares have jumped more than 25 per cent in the past three weeks on speculation of the breakup.