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Post by atsfan on Dec 11, 2015 4:44:18 GMT -8
NS management would have to be incredibly stupid to allow this. I have not heard of as you describe. Can you give an example of where a railroad or airline merger was proposed, all sorts of changes made, was then denied, and the changes remained? Southern Pacific Santa Fe. Krebs came from SP to head the new holding company (leading both ATSF and BNSF in the aftermath), the holding company acquired all the non-rail assets and when the merger was denied the holding company sold many of the assets. It's not quite the same as rail properties changing hands and being retained, but it is the situation you describe. Curt said rail assets like train yards and rail lines. This usually does not happen so I would be interesting to learn from an example. |
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Post by Spikre on Dec 11, 2015 11:36:59 GMT -8
 would be surprised if CP could get even 20% of NS Stock Holders vote. too many Employees own stock,and they don't seem too unhappy with the current NS Direction. but this is supposed to be a sort of "Free Economy",so CP can try almost anything they want,as long as no laws get broken. CSX had their "Poison Pill",looks like NS doesn't,so that is what may be encouraging CP to try this stuff. interesting that CP isn't paying [$95.00] $115.00 a share,that might work ?? Edit,maybe a minimum of $115.00 Cash for NS stock ? also saw a number for NS outstanding shares,but cant find it now. will try again tomorrow. Spikre 
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Post by valenciajim on Dec 11, 2015 13:12:00 GMT -8
Spikre--read the Forbes article to which I linked. It shows how CP and its shareholders could spin the storyline.
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Post by fr8kar on Dec 11, 2015 14:15:25 GMT -8
would be surprised if CP could get even 20% of NS Stock Holders vote. too many Employees own stock,and they don't seem too unhappy with the current NS Direction. I don't know if I'd go that far. I get the impression many TY&E aren't happy with NS management, but CP's management (and morale) is notoriously worst in the industry. Has anyone read any of the stories about BNSF's position on this? Whatever happens could start a chain reaction. |
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Post by calzephyr on Dec 11, 2015 15:15:30 GMT -8
would be surprised if CP could get even 20% of NS Stock Holders vote. too many Employees own stock,and they don't seem too unhappy with the current NS Direction. I don't know if I'd go that far. I get the impression many TY&E aren't happy with NS management, but CP's management (and morale) is notoriously worst in the industry. Has anyone read any of the stories about BNSF's position on this? Whatever happens could start a chain reaction. The answer to BNSF's position on the NS deal came out today on the Cable Business news. Mr Buffett is interested in purchasing the NS also and will look into the deal as a spoiler or victor if this deal is possible. The Candidate he is backing will probably allow him to purchase the NS when she is elected. This could be an avenue for him to actually purchase the NS since the regulation authority can be overridden if they really want the deal. I would hate to see all of those black horses become orange but it could happen now that his path would be cleared. CP does not stand a chance if Mr. B really wants the deal. It would truly be a Transcontinental railroad and the Union Pacific would try to purchase the CSX, which might be disallowed by the same group that would green light Mr. B's deal. Just a thought. We will see. The same news today shows he is backing her for office. Larry |
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Post by atsfan on Dec 11, 2015 17:26:57 GMT -8
I don't know if I'd go that far. I get the impression many TY&E aren't happy with NS management, but CP's management (and morale) is notoriously worst in the industry. Has anyone read any of the stories about BNSF's position on this? Whatever happens could start a chain reaction. The answer to BNSF's position on the NS deal came out today on the Cable Business news. Mr Buffett is interested in purchasing the NS also and will look into the deal as a spoiler or victor if this deal is possible. The Candidate he is backing will probably allow him to purchase the NS when she is elected. This could be an avenue for him to actually purchase the NS since the regulation authority can be overridden if they really want the deal. I would hate to see all of those black horses become orange but it could happen now that his path would be cleared. CP does not stand a chance if Mr. B really wants the deal. It would truly be a Transcontinental railroad and the Union Pacific would try to purchase the CSX, which might be disallowed by the same group that would green light Mr. B's deal. Just a thought. We will see. The same news today shows he is backing her for office. Larry Oh good lord we dont need a transcontinental railroad. Of course the bribes will be paid and...... |
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Post by calzephyr on Dec 12, 2015 11:50:59 GMT -8
Exactly correct. We don't need a coast to coast railroad since the traffic is handled off in Chicago, St. Louis Memphis or New Olean's, and some other smaller points.. Seems like the might Mississippi is the general dividing point for all and still is in many ways. Yes, all of the railroads go over the line, but do not continue very far.
Larry
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Post by valenciajim on Dec 12, 2015 15:37:15 GMT -8
I did not realize that Mr. Buffet was also in her pockets. I know he is deep into the incumbent's pockets.
With energy prices at a low point right now, the railroads are hurting, so Berkshire Hathaway could try to purchase a complimentary railroad on the cheap.
Usually when there is a hostile offer, a white knight arises.
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Post by calzephyr on Dec 12, 2015 18:56:01 GMT -8
I did not realize that Mr. Buffet was also in her pockets. I know he is deep into the incumbent's pockets. With energy prices at a low point right now, the railroads are hurting, so Berkshire Hathaway could try to purchase a complimentary railroad on the cheap. Usually when there is a hostile offer, a white knight arises. Jim I read the news clip and then noticed the one about who he is supporting. I was surprised also, but that was in print. Larry |
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Post by curtmc on Dec 13, 2015 11:35:21 GMT -8
Ever since 1995 I've been saying the real meaning of BNSF is:
Buy
Norfolk
Southern
Fast
PS. Reply to the resident TROLL... With so few railroads left nobody is going to have examples of that having happened in railroads, but it has and does happen in other businesses from manufacturing firms to retail chains. The BIG POINT is that NS management does NOT have any control over NS shareholders and NS shareholders are free to sell their stock to CP (or BNSF) no matter what current NS management wants. Hedge fund managers - who control a lot of railroad stock - are generally looking to make quick money for their fund holders and not always going by what current management thinks or does.
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Post by valenciajim on Dec 13, 2015 14:07:50 GMT -8
A few thoughts. It is not surprising that Mr. Buffett is supporting the leading female candidate for President. It is interesting to note that he was one of the first to support the incumbent president in 2008. Since we are not suppose to discuss politics in this forum, that is all I will say.
Curt--I love your acronym.
finally, the business world is consolidating in ways that were not imaginable a few years ago. Look at the Dow Chemical DuPont merger. Twenty years ago, people were upset that management did not take the shareholders interests seriously. Today the hedge funds accumulate shares to bully management into running a company to maximize short term profits. The Forbes article that I commented on earlier in this thread has an interesting discussion on what could motivate NS shareholders to go along with the CP merger. Now with BNSF in the mix, that shareholders have some interesting choices that may not be favored by management. Imagine instead of getting CP stock, you got Berkshire Hathaway stock or cash. But I don't feel sorry for NS management, they will make a lot of money out of this.
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Post by calzephyr on Dec 14, 2015 15:57:09 GMT -8
CP-NS transcon a craps table roll
Written by Frank N. Wilner, Contributing Editor
in
Share
.
Some more thoughts from Railway Age
Few obstacles bedevil railroads as has the Mississippi River. Spanning it was the nation’s first rail bridge in 1856—promptly assaulted by steamboat Effie Afton. While the bridge was repaired and more constructed, the river remains a problematic divide, separating, with few exceptions, eastern railroads from those operating in the West and producing grueling interchange bottlenecks at Chicago.
Whether single-line Transcons encompassing U.S. railroads is a solution prompts spirited debate. For dissimilar reasons, past transcon efforts failed—Seaboard Coast Line (now part of CSX) with Southern Pacific (now part of Union Pacific); BNSF with Canadian National (CN); and Canadian Pacific (CP) with CSX.
Dreamers remain, including 71-year-old Hunter Harrison, CP’s CEO—a brusque presence who has so improved productivity on the three railroads he superintended (Illinois Central, CN and CP) that comparisons are made with industrial engineering legend Frederick Taylor.
Whether Harrison will create a legacy rivaling 19th century titans James J. Hill, Collis Huntington and Cornelius Vanderbilt by securing regulatory approval to create the first North American transcon by hitching CP, end-to-end, with Norfolk Southern (NS), is unknown.
Notwithstanding pro-competitive features, formidable obstacles include skeptical CP stockholders, NS itself, other railroads, regulators, Congress and the new Canadian prime minister.
CP will pay an acquisition premium for NS stock, expecting a more than compensatory boost in NS profitability achieved by tamping down the NS operating ratio from near 70 to a target of 60. While end-to-end marriages lack easily jettisoned redundancies, and U.S. statutory protection impedes layoffs, Harrison has a proven model for squeezing the operating ratio—substituting high hourly pay, guaranteed days off, scheduled assignments, eliminating road and yard distinctions, and fixed crew-calling windows permitting a trimming of the work force through attrition, putting productivity on steroids while train and engine workers boost annual earnings as much as $30,000.
Harrison may be a Tennessee native, but among the clannish good ’ol boys running NS he is an in-your-face interloper at odds with their cherished courtly manners. Even assuming Harrison could succeed in wringing from NS consequential new productivity gains, he must travel south to do so, leaving CP investors bereft of the precise CP managerial direction deemed so valuable.
Then there is Harrison’s willingness, in exchange for merger approval, to provide a pro-competitive lagniappe of track access (reciprocal switching) and bottleneck pricing at sole-served U.S. points. Shippers crave it; Canada requires it; U.S. railroads, rich with political influence, stalwartly oppose it.
The Surface Transportation Board (STB), with sole authority over rail mergers, may be independent of direct political influence, but STB members seeking new terms require Senate confirmation, the STB budget requires congressional approval, and a merger-averse Congress could amend the statute—transferring rail merger authority to the merger-cynical Department of Justice; or enacting Senate Commerce Committee Chairman John Thune’s (R-S.Dak.) bill to increase STB size by two voting members, maybe selected with a “no merger” vote in mind.
In June, amidst widespread service disruptions, STB member Deb Miller expressed “no appetite” for a merger application. Notwithstanding expected CP assurances of a seamless merger, history is littered with significant unanticipated post-merger service disruptions. Coincidentally, CP President Keith Creel visited with STB members individually Nov. 4 in Washington. Two days later, the CP-NS story broke.
STB merger rules require consideration of anticipated responsive merger applications and their potential impact on competition and service—perhaps CN with BNSF, and Union Pacific with CSX creating the long-sought wholly U.S. transcon.
With whom will Kansas City Southern (KCS)—operating north-south into Mexico—join? Harrison and KCS CEO David Starling trace roots to St. Louis-San Francisco Railway (the Frisco, now part of BNSF) and later interacted as Burlington Northern operating officials.
In Ottawa, the Canadian prime minister holds absolute power to nix rail mergers. As CP-NS would strengthen CP as an international logistics giant at the expense of CN, the latter might invoke, in opposition, its own formidable political muscle. CN already is pursuing a corporate espionage lawsuit against CP.
An interim voting trust allows CP to consummate the financial transaction ahead of merger. NS stockholders receive their premium plus CP shares. Blocked is a bidding war for NS by UP or Berkshire Hathaway. Voting trusts need STB approval. A jiggery-pokery attempt to send Creel to NS and NS CEO Jim Squires to CP may backfire as improper common control.
As Pollyanna and Cassandra wished each other, “May you live in interesting times.”
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Post by atsfan on Dec 14, 2015 17:54:19 GMT -8
Ever since 1995 I've been saying the real meaning of BNSF is: Buy Norfolk Southern Fast PS. Reply to the resident TROLL... With so few railroads left nobody is going to have examples of that having happened in railroads, but it has and does happen in other businesses from manufacturing firms to retail chains. The BIG POINT is that NS management does NOT have any control over NS shareholders and NS shareholders are free to sell their stock to CP (or BNSF) no matter what current NS management wants. Hedge fund managers - who control a lot of railroad stock - are generally looking to make quick money for their fund holders and not always going by what current management thinks or does. Curt you specifically say it happens. Then when you are ask to provide an example you cant (because even you admit there arent any). So you are just making it up as you go along. |
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Post by valenciajim on Dec 15, 2015 11:38:31 GMT -8
There was another article in today's WSJ basically saying that Ackman will wage a proxy fight to get control of NS. The Railway Age article seems to cast a pall on mergers involving Canadian railways.
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Post by atsfan on Dec 15, 2015 14:08:09 GMT -8
There was another article in today's WSJ basically saying that Ackman will wage a proxy fight to get control of NS. The Railway Age article seems to cast a pall on mergers involving Canadian railways. Quit saying it is a merger. It isn't. It is a hostile takeover attempt. If successful NS will be gutted and burned. |
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Post by valenciajim on Dec 15, 2015 16:47:19 GMT -8
I was merely using the term from the article in Railway Age. The exact quote from the article is: "In Ottawa, the Canadian prime minister holds absolute power to nix rail mergers."
I suspect the author was using the term merger to generically describe various types of business combinations.
I agree with your assessment about gutting and burning, though.
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Post by calzephyr on Dec 16, 2015 6:32:52 GMT -8
There are more changes in the offer today by CP.
Larry
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Post by Spikre on Dec 16, 2015 9:45:07 GMT -8
Curt, what was posted from here last week was out of date before it got printed. this takeover attempt is getting as complicated as the CSX-NS fight over CR. and recall that CSX thought they had a "Dunnn Deal" originally,then ended up with the short end of the stick,except for the line to Boston. had an answer for You,but I'm blocked by You,so this will do for now. Edit- where did the CP bought 40% of NS stock come from ? would seriously doubt that,CP wouldn't spend that much unless they have revised their attack plan ? Spikre 
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Post by Paul Cutler III on Dec 16, 2015 12:32:08 GMT -8
Spikre,
I don't think CSX "made out" with the Boston line. CSX has been on a rapid retreat out of Massachusetts as fast as they can. They've already left Boston and Beacon Park Yard (soon to be more college dorms), they've sold off the Framingham Secondary and the Greenbush Line to the State of Mass., and rumors are running that they'd sell off the Middleboro Cluster to a qualified bidder if they could. It appears that not too far in the future, CSX will be cut back to Worcester, and then who knows? Maybe P&W will grab the rest of the B&A.
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Post by atsfan on Dec 16, 2015 14:50:01 GMT -8
CSX's main gain was the Water Level route of the NYC.
The line across Mass. has seen traffic decline with the industry of New England so it is nowhere near as profitable for CSX.
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Post by atsfan on Dec 16, 2015 14:52:33 GMT -8
There are more changes in the offer today by CP. Larry CP will keep at it for awhile. They want to gut NS and get rich quick on the sales and stock bumps. Actual railroading is far down on the list. Their offer is still too low. You will know it is high enough if and when some large holders of the stock start to nibble. But they are far from that still. |
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Post by calzephyr on Dec 17, 2015 13:12:49 GMT -8
Now the Union Pacific is talking about the down side of such a merger!!!
Union Pacific Corp. jumped into the debate over railroad consolidation by saying that Canadian Pacific Railway Ltd.’s proposed takeover of Norfolk Southern Corp. risks adding to gridlock at the industry’s crucial Chicago hub.
“A single merger could actually increase congestion in Chicago if the merging parties used shared assets to preference their own traffic,” Union Pacific said in a memo to employees Thursday.
Union Pacific used the note to reiterate its opposition to additional consolidation and send a warning to regulators of consequences from letting Canada’s second-biggest railroad combine with the No. 2 carrier in the eastern U.S. Such a deal would upend the North American industry after more than 15 years of stability since the last major tie-up.
Canadian Pacific, rebuffed so far by Norfolk Southern, is following a strategy that may eliminate jobs, crimp investment and let regulators to set rates and service conditions, Union Pacific said. A combination of Canadian Pacific and Norfolk Southern has “significant” regulatory hurdles because it would have to enhance competition and not just maintain it, Union Pacific said.
“UP will continue to monitor the situation very closely,” the Omaha, Nebraska-based railroad said.
Increased Bid
Canadian Pacific sweetened its offer on Wednesday and vowed to take the $27 billion cash-and-stock bid directly to shareholders after Norfolk Southern’s board rejected earlier proposals. The U.S. railroad responded that it would “carefully consider” the latest offer.
Combining the railroads would enable some traffic to be routed away from Chicago through Canada and down the U.S. East Coast, Canadian Pacific Chief Executive Officer Hunter Harrison has said.
Canadian Pacific responded Thursday to a Dec. 14 letter from 10 Democratic legislators who expressed concern to the Surface Transportation Board about the merger’s impact on Chicago rail congestion, on Illinois shippers and from a plan to change management at Norfolk Southern.
“Improving Chicago is a key objective of this transaction and one of the many ways it is in the public interest,” Canadian Pacific said in one of seven points in the letter signed by Harrison.
Congestion in Chicago, the busiest rail hub in North America, was a focus of regulators last year when record cold weather and a surge in crude-oil carloads caused a traffic jam that slowed the entire rail network.
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Post by calzephyr on Dec 23, 2015 10:24:45 GMT -8
Today another rejection by NS. 12/23/2015
Norfolk Southern Corp. NSC, +0.57% rejected on Wednesday Canadian Pacific Railway Ltd.'s CP, +0.29% latest buyout bid, saying it remained "grossly inadequate" and creates substantial regulatory risks. The railroad company said the decision by the board of directors was unanimous. Norfolk said the only difference in the bid it received on Dec. 16, from the one that was rejected on Dec. 8, was the inclusion of a contingent value right (CVR), which Canadian Pacific said is a "highly liquid instrument" that protects the value of its cash-and-stock offer by giving Norfolk shareholders the ability to convert shares to cash at their discretion. Norfolk responded by saying it believed the CVR wouldn't protect shareholder value because it's likely to trade at a significant discount. Norfolk's stock, which wasn't active in premarket trade, has rallied 13% over the past three months, but was still down 21% year to date.
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Post by valenciajim on Dec 23, 2015 20:53:05 GMT -8
You always have to be leery of strange financial instruments, such as the CVRs. The value would depend upon other things, who is backing it? I have not read any of the materials in the offer, but it looks like a highly engineered Wall Street product.
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Post by valenciajim on Jan 2, 2016 11:31:11 GMT -8
Today's Wall Street journal has an excellent op-ed piece about the merger. Most of the discussion points raised in the article have already been discussed here with one exception. If the combined railroad is based in Canada, it would pay significantly less US tax. That alone would likely be a how stopper for the US regulators. The article stated that the Obama Administration would likely never approve this merger, but Ackman is hoping that the new administration would be more favorably disposed. The link to the article follows, but a subscription is required. Ackman and the Politics of Railroad Mergers |
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Post by Spikre on Jan 8, 2016 12:22:31 GMT -8
 anything New here ? or have the CP Crooks retreated to their favorite Glacier ? Spikre
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