CSX rebuffed $20 billion Canadian Pacific merger offer

[calzephyr]

CP seems to be at it again, but this time the target is the CSX


CSX rebuffed $20 billion Canadian Pacific merger offer

Canadian Pacific Railway Ltd., which is pressing an unwanted takeover bid for Norfolk Southern Corp., recently revived a $20 billion-plus effort to combine with CSX Corp. in the latest sign of its eagerness to bring consolidation to the industry.
Canadian Pacific CP, -1.60% made a fresh approach to CSX CSX, +1.26% in January, according to people familiar with the matter and Canadian Pacific Chief Executive Hunter Harrison. Though the approach was rebuffed, Canadian Pacific remains interested, they said.
The western-focused railroad sees value in combining with Norfolk Southern NSC, +2.15% or CSX, given the stronghold each has in the eastern U.S. Although Canadian Pacific remains committed to its about $30 billion bid to acquire Norfolk Southern, the Canadian company is determined to build a transnational railway and wants to keep its options open, Hunter said when reached for comment Tuesday.
“We’ve said all along that if we looked at the synergies between the two eastern carriers, right now both of them would work for us,” he said.
It isn’t clear why CSX said no. Shares of the Jacksonville, Fla.-based company, which is working with advisers, rose 2% to $24.64 while Canadian Pacific gained 1.5%, to $122.96, both in 4 p.m. trading on Tuesday. CSX rose 5% in late trading after The Wall Street Journal’s report of the approach.
An expanded version of this

[atsfan]

It isn't clear why CSX said no?

[canrailfan]

Canadian Pacific had a transcontinental railroad until they let the lines east of Montreal wither and then threw them away.

In the boom days of railroad-building in the late 1800's and early 1900's, railroads worked to bring business and industries to their tracks. They were an engine (no pun intended) for economic development and growth. Today they are the exact opposite, every line that is abandoned and torn up reduces the economic potential and growth of the region losing service. Railroads today keep going for the 'easy money' of major resource and long-haul intermodal traffic. CP is one of the worst examples of this change. If CP gets hold of either NS or CSX, they will begin to lop off many of the lines serving mid- to small-sized NS or CSX customers in order to maximize profit and keep their all-important operating ratio artificially low.

Hopefully CP won't get either NS or CSX.

David

[Spikre]

a Merger/Takeover with almost ANY Line would Save CPs sorry BUTT.
but if 1st You dont Succeede, keep trying until they are Worn Down.
then they may give in.
CP should just put themselves up for Sale.
Spikre

[atsfan]

CSX or NS will look like this if CP purchases them:

[calzephyr]

This is the latest today!!



The threat to file a lawsuit might very well be the Canadian Railroad taking a page out of a certain American politician's book.
“My gut feeling is, in the spirit of Donald Trump, they get a third of the benefit just by threatening to sue,” said Gardner Davis, a Jacksonville-based corporate lawyer with Foley & Lardner. “It doesn't cost them anything and it gets people asking 'why won't Norfolk Southern talk with Canadian Pacific?'”
While Davis said he doesn't foresee the lawsuit having a significant long-term impact on the merger, stirring the pot is one of the only moves available to Canadian Pacific, given the roadblocks.
“In M&A law, no one is going to take over a railroad today without either a compelling economic offer shareholders can't turn down, or a partner who wants to go with the deal,” he said. “Canadian Pacific is offering synergies and benefits and Norfolk Southern is saying 'go away.' What Canadian Pacific has to do is stir the pot because they're somewhat desperate. They don't have a clear strategy move, because the only clear move in M&A is money.”
For its part CSX said it is not involved in any moves to block CP's efforts.

[atsfan]

Mar 2, 2016 15:21:15 GMT -8 calzephyr said:

This is the latest today!!



The threat to file a lawsuit might very well be the Canadian Railroad taking a page out of a certain American politician's book.
“My gut feeling is, in the spirit of Donald Trump, they get a third of the benefit just by threatening to sue,” said Gardner Davis, a Jacksonville-based corporate lawyer with Foley & Lardner. “It doesn't cost them anything and it gets people asking 'why won't Norfolk Southern talk with Canadian Pacific?'”
While Davis said he doesn't foresee the lawsuit having a significant long-term impact on the merger, stirring the pot is one of the only moves available to Canadian Pacific, given the roadblocks.
“In M&A law, no one is going to take over a railroad today without either a compelling economic offer shareholders can't turn down, or a partner who wants to go with the deal,” he said. “Canadian Pacific is offering synergies and benefits and Norfolk Southern is saying 'go away.' What Canadian Pacific has to do is stir the pot because they're somewhat desperate. They don't have a clear strategy move, because the only clear move in M&A is money.”
For its part CSX said it is not involved in any moves to block CP's efforts.

That quote makes little sense. Or is poorly written.

Everyone on planet earth knows what CP is doing.
At some point, IF CP offers more money (WAY more than they are now), people will get interested.

But it will be a tough road to plow to allow CP to come in, take over, and gut to the bone one of the last railroad systems in the USA. With enough bribes......errr.....campaign contributions though anything is possible.

See US Airline industry.............

[valenciajim]

Ackerman's Fund, Pershing Square Associates is down 19.9% for the past year. I doubt that CP will be the only railroad involved if they raise their offering price and the NS shareholders get interested.

[atsfan]

Mar 2, 2016 18:00:20 GMT -8 valenciajim said:

Ackerman's Fund, Pershing Square Associates is down 19.9% for the past year. I doubt that CP will be the only railroad involved if they raise their offering price and the NS shareholders get interested.

For enough money anyone is interested.

Research MCI, BT, GTE, and Worldcom.