Canadian Pacific Said to Weigh Deal for Norfolk Southern.

[elleng]

Canadian Pacific Railway is weighing a potential takeover of Norfolk Southern, a person briefed on the matter said on Monday, potentially prompting a round of consolidation in the railroad industry.

Canadian Pacific, one of Canada’s biggest railroad operators, has held preliminary discussions with its possible takeover target and has hired advisers, this person said.

Norfolk Southern had a market value of nearly $24 billion as of Friday’s market close, while Canadian Pacific was valued at $20.5 billion.

Still, the two railroads ultimately may not reach a deal, this person cautioned.

If completed, a union of the two companies would help usher in the latest in a series of mergers among railroad companies over recent decades, concentrating stewardship of the tracks that crisscross the continent to a handful of corporations.

Norfolk Southern and its primary rival, CSX, operate in the eastern half of the United States, while Union Pacific and Burlington Northern operate in the western half.

Continue reading the main story
RELATED COVERAGE

An Amtrak derailment in Philadelphia killed eight people in May. Without a new deadline, railroads would be required to install new safety technology by the end of this year.House Passes Deadline Extension for Rail Safety SystemOCT. 27, 2015
N.J. Transit to Lead Environmental Study for Hudson Rail TunnelOCT. 14, 2015
The largest deal of note over the past several years was Berkshire Hathaway’s takeover of Burlington Northern for about $26 billion, the largest acquisition in Warren E. Buffett’s career. Mr. Buffett is Berkshire’s chief executive.

Continue reading the main story
RELATED IN OPINION

Op-Ed Contributors: No Train Today? Ask Congress WhyOCT. 28, 2015
Combining Norfolk Southern and Canadian Pacific is not a new idea. The hedge fund manager William A. Ackman, who became a major investor in Canadian Pacific three years ago and who helped install its current chief, Hunter Harrison, hinted last fall that Canadian Pacific might hunt for an acquisition.

Shares of Norfolk Southern surged more than 11 percent in midafternoon trading on Monday after Bloomberg News reported the talks. Shares of Canadian Pacific were up 6 percent.

http://www.nytimes.com/2015/11/10/business/dealbook/canadian-pacific-said-to-weigh-deal-for-norfolk-southern.html

Sorry to bore y'all; its my thing!

[mahatmakanejeeves]

1. Canadian Pacific Pitches Tie-Up With Norfolk Southern

Hat tip, Trainorders: CP proposes to merge with NS on friday

Canadian Pacific Pitches Tie-Up With Norfolk Southern

Proposal from Canadian Pacific CEO for merger or other partnership was received coolly

By Jacquie McNish
[e-mail]
@jacquiemcnish

Updated Nov. 13, 2015 8:27 p.m. ET

The chief executive of Canadian Pacific Railway Ltd. met with his counterpart at Norfolk Southern Corp. on Friday and proposed a merger of the railroad giants, an advance that was met with a chilly reception, according to a person familiar with the matter.

Canadian Pacific CEO Hunter Harrison outlined a variety of possible scenarios—including merging the companies or another form of partnership—in his meeting with Norfolk Southern Chairman and CEO James Squires, the person said.

Mr. Squires was cool to the approach, the person said, and CP is now considering taking its proposal public to put pressure on Norfolk Southern.
....

A merger with Norfolk Southern would create an industry giant with a combined market value of about $47 billion, and a rail network that would stretch from the Canadian West Coast to the Gulf of Mexico and U.S. Atlantic seaboard. ... There would be little overlap between the rail networks—something that could promote efficiency—at a time when both railroads are facing declining freight volumes.

Full disclosure: I own shares of NSC.

[mahatmakanejeeves]

2. Canadian Pacific confirms its interest in buying rival Norfolk Southern

Canadian Pacific confirms its interest in buying rival Norfolk Southern

Posted: Wednesday, November 18, 2015 11:00 am
By Bob McCabe The Virginian-Pilot

NORFOLK — Any lingering doubts about the seriousness of a Canadian railroad’s wish to take over Norfolk Southern Corp. were dashed on Tuesday.

Canadian Pacific Railway Ltd. announced that it had sent a letter to the Norfolk-based railroad, proposing a “business combination that would create a transcontinental railroad with the scale and reach to deliver improved levels of service to customers and communities while enhancing competition and creating significant shareholder value.”

The announcement said the proposal “includes a sizable premium in cash and stock offered to NS shareholders,” and would lead to a company that could generate faster earnings growth than either railroad could achieve on its own.

Full disclosure: I own shares of NSC.

[elleng]

3. 'faster earnings growth than either railroad could achieve on its own,'

been there, ?done? that, really depends on the economy, so these days, questionable. And relatively few saving in an 'end to end' except some administrative expenses, not many in operations.

Hunter Harrison really DOES live up to his name, HUNTER, been doing this stuff for a while. https://en.wikipedia.org/wiki/E._Hunter_Harrison

[mahatmakanejeeves]

4. Norfolk Southern rejects revised Canadian Pacific proposal

Norfolk Southern rejects revised Canadian Pacific proposal

By Krissa Welshans

Published on: Dec 23, 2015

Norfolk Southern Corporation (NS) announced today that its board of directors unanimously rejected Canadian Pacific’s (CP) December 16, publicly disclosed, revised proposal. The offer included $32.86 in cash, a fixed exchange ratio of 0.451 shares in a new company that would own Canadian Pacific and Norfolk Southern, and 0.451 of a Contingent Value Right (CVR).

In a letter sent December 23, NS told CP’s chief executive officer E. Hunter Harrison and chairman of the board Andrew F. Reardon that after careful review, the board unanimously determined the latest revised proposal was “grossly inadequate, creates substantial regulatory risks and uncertainties that are highly unlikely to be overcome, and is not in the best interest of the company and its shareholders.”

NS added that this would be the case even if the CVR had a value at the high end of the range suggested in your publicly filed presentation.