Advertisement

Header Utility Menu

  • Subscribe
  • Advertise
  • Contact Us
  • Events

LinkedIn Facebook Twitter Instagram Get Our App

  • Login

Virginia Business

Mobile Menu

  • Issues
  • Industries
    • Banking/Finances
    • Business Law
    • Commercial Real Estate
    • Economic Development
    • Education
    • Energy/Green
    • Federal Contracting
    • Government
    • Healthcare
    • Hotels/Tourism
    • Insurance
    • Ports/Trade
    • Small Business
    • Technology
    • Transportation
  • Regions
    • Central Virginia
    • Eastern Virginia
    • Northern Virginia
    • Roanoke/New River Valley
    • Shenandoah Valley
    • Southern Virginia
    • Southwest Virginia
  • Reports
    • Best Places to Work
    • Business Person of the Year
    • CEO Pay
    • Coronavirus 2020
    • Generous Virginians Project
    • Legal Elite
    • Most Influential Virginians
    • Maritime Guide
    • Site Locator
    • The Big Book
    • Virginia CFO Awards
  • Company News
    • For the Record
    • People
  • Opinion
  • Lists
  • Awards/Events
    • Diversity Leadership Series
    • Vote Now for Women in Leadership
    • Virginia 500
    • Legal Elite
    • CFO Awards
    • Big Book of Lists
    • 100 People To Meet
    • Best Places To Work
  • Virginia 500
    • Read the issue
    • Order a copy
    • Buy an award plaque
    • Nominate execs for 2021

Advertisement

Header Primary Menu

  • virginiabusiness.com
  • Subscribe
  • Advertise
  • About Us
  • Contact Us

Home News Regions Eastern Virginia Norfolk Southern mulls $28.4 billion offer

Norfolk Southern mulls $28.4 billion offer

Published November 30, 2015 by Robert Powell, III

Norfolk Southern’s initial reaction showed little enthusiasm
for the Canadian Pacific’s proposal. Photo courtesy Wikipedia

Norfolk Southern Corp. said that its board of directors would review an unsolicited $28.4 billion acquisition offer from Canadian Pacific Railway Ltd., Canada’s second-largest railroad.

The Norfolk-based company’s initial reaction to the offer, however, showed little enthusiasm for a deal.

Norfolk Southern described the offer as a “low-premium, non-binding and highly conditional indication of interest,” in which Canadian Pacific would acquire the company for $46.72 in cash and 0.348 Canadian Pacific (CP) shares for each Norfolk Southern share.

The offer represents “a premium of less than 10 percent based on closing prices” on Nov. 16, Norfolk Southern said. Its stock price was $88.30 that day.

The company also raised questions about potential regulatory hurdles.  The deal would have to pass muster with the U.S. Surface Transportation Board and Canadian regulators.

While the offer was disclosed on Nov. 17, it was initially made in a letter to Norfolk Southern CEO James Squires on Nov. 9. “Mr. Squires asked CP CEO Hunter Harrison to hold off on sending this letter until such time as the two CEOs could meet face to face, which occurred last Friday November 13, 2015,”  Canadian Pacific said in releasing the letter.

The letter said its acquisition proposal represented a 23 percent premium at that time over Norfolk Southern’s 45-day volume-weighted average of $79.14.

The disclosure of the offer capped weeks of rumors that the two companies had entered preliminary talks.

“We believe that combining our two great organizations will allow us to form an integrated transcontinental railroad with the scale and reach to deliver unsurpassed levels of safety and service to our customers and communities while also increasing competition and creating significant shareholder value,” says the letter, which was signed by Harrison and Andrew F. Reardon, Canadian Pacific’s chairman of the board.

Norfolk Southern shareholders would own 41 percent of the share’s in the combined company, according to the proposal.

The letter says a deal would create a “transcontinental rail network connecting the major industrial production and population centers across North America,” reaching major ports located on the Gulf of Mexico, the Atlantic and the Pacific.

Canadian Pacific said the deal would create $1.8 billion in annual operating savings during the next several years plus substantial tax savings.

Canadian Pacific also said it had a financing commitment of $14.2 billion from J.P. Morgan Securities LLC.

Related Stories

Virginia Business logo

Chesapeake eatery location sells for $1.8 million

Virginia Business logo

Wheeler Real Estate Investment Trust will acquire Wheeler Development

Virginia Business logo

Local investors acquire City Center for $64 million

Trending

Finance/Insurance: STEPHAN Q. CASSADAY

Finance/Insurance: PAUL B. MANNING

Federal Contractors/Technology: JASON PROVIDAKES

Education: ANNE M. KRESS

Artemis I to launch with help from Va. contractors

Sponsored Stories

Why is my Less Than Truckload (LTL) freight pricing going up and my service level going down?  

Beyond Juneteenth – How Capital One is Commemorating and Implementing Change

How We Help Your Business Operate Better

Before the Breach: Get Serious About Cyber Resilience

Professionals are Discovering What it Means to Live Uniquely in the Alleghany Highlands of Virginia

Riverside Logistics Celebrates 25th Anniversary!

Girls for a Change Empowers Black Youth for the Future Workforce

The Jackson Ward Collective is equipping Black-owned small businesses with the tools for success

Advertisement

Advertisement

Trending

Finance/Insurance: STEPHAN Q. CASSADAY

Finance/Insurance: PAUL B. MANNING

Federal Contractors/Technology: JASON PROVIDAKES

Education: ANNE M. KRESS

Artemis I to launch with help from Va. contractors

Sponsored Stories

Why is my Less Than Truckload (LTL) freight pricing going up and my service level going down?  

Beyond Juneteenth – How Capital One is Commemorating and Implementing Change

How We Help Your Business Operate Better

Before the Breach: Get Serious About Cyber Resilience

Professionals are Discovering What it Means to Live Uniquely in the Alleghany Highlands of Virginia

Riverside Logistics Celebrates 25th Anniversary!

Girls for a Change Empowers Black Youth for the Future Workforce

The Jackson Ward Collective is equipping Black-owned small businesses with the tools for success

Get Virginia Business directly on your tablet or in your mailbox!

Subscribe to Virginia Business

Advertisement

Advertisement

Footer Primary Menu

  • virginiabusiness.com
  • Subscribe
  • Advertise
  • About Us
  • Contact Us

Footer Secondary Menu

  • Industries
  • Regions
  • Reports
  • Company News
  • Events

Sign Up For Our Newsletter

Sign Up

LinkedIn Facebook Twitter Instagram Get Our App

Privacy Policy Cookie Policy

Footer Utility Menu

Copyright © 2023 Virginia Business. All rights reserved.

Site Maintained by TechArk