NS Finds Allies in Spurning CP Bid

January 10, 2016

Norfolk Finds Allies in Spurning Ackman-Backed CP Takeover Bid

By Thomas Black and Frederic Tomesco, Bloomberg Business

Norfolk Southern Corp. is gaining political and customer support for rejecting Canadian Pacific Railway Ltd.’s takeover bid, which could make it harder for the Canadian company and investor Bill Ackman to wage a proxy fight. Website Insert Coach Business Class Food Service copy

The U.S. Surface Transportation Board on Friday posted on its website 17 letters from shippers and lawmakers expressing concern or opposition to the combination. The regulator said in 2001 that it wouldn’t approve a deal unless it was confident that service and competition won’t be harmed.

“An end-to-end merger in today’s already highly-concentrated rail industry threatens what remains of other forms of competition,” according to a Dec. 22 letter from the Alliance of Automobile Manufacturers and the Association of Global Automakers that was posted by the STB.

Canadian Pacific Chief Executive Officer Hunter Harrison has vowed to take his merger proposal directly to Norfolk Southern shareholders after the U.S. railroad rejected a sweetened offer on Dec. 23 and called it “grossly inadequate.” Canadian Pacific responded that the U.S. carrier’s board wasn’t aligned with shareholders’ interests.

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