 | Canadian Pacific Railway Limited - CP.t was founded in 1881 to physically unite Canada and Canadians from coast to coast. Canadian Pacific spun out its five subsidiaries into separate companies in late 2001. CPR's 14,000-mile network extends from the Port of Vancouver to The Port of Montreal, and to the U.S. industrial centers of Chicago, Newark, Philadelphia, Washington, New York City and Buffalo. |  |
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Canadian Pacific Railway Ltd. (TSX:CP) (NYSE:CP) today announced that it has terminated efforts to merge with Norfolk Southern Corp. (NS), including the withdrawal of a resolution asking NS shareholders to vote in favour of good-faith negotiations between the two companies. No further financial offers or overtures to meet with the NS board of directors are planned at this time.
CP proposed the creation of a true end-to-end railroad that would enhance competition, ease freight congestion now and into the future, improve service to shippers, better support the economy and generate significant shareholder value for both companies.
"We have long recognized that consolidation is necessary for the North American rail industry to meet the demands of a growing economy, but with no clear path to a friendly merger at this time, we will turn all of our focus and energy to serving our customers and creating long term value for CP shareholders," said CP CEO E. Hunter Harrison.
GCanadian Pacific Railway Limited (TSX: CP) (NYSE: CP) today filed a preliminary proxy statement with the Securities and Exchange Commission (SEC), which outlines the shareholder resolution to be considered at the upcoming Annual Meeting of Norfolk Southern (NS) shareholders requesting that the NS board of directors promptly engage in good faith discussions with CP regarding a business combination.CP has proposed a merger with NS that would create an integrated transcontinental railroad with the scale and reach to deliver unsurpassed levels of safety and service to the customers and communities of both companies.
"This is an opportunity for NS shareholders – who have been telling us since the beginning that they are in favour of the proposed business combination – to speak up and be heard by NS' board of directors," said CP CEO, E. Hunter Harrison. "We are not asking NS shareholders to vote on the business proposal itself, but to vote in favour of the shareholder resolution calling for NS to engage in good faith discussions with CP regarding a potential combination."
The shareholder resolution provides a means for NS shareholders to demonstrate, in a coordinated and clear manner, their support for NS to engage in a meaningful dialogue with CP regarding a possible business combination between the two companies.
In its preliminary proxy statement, filed with the SEC on February 29, 2016, NS expressed, for the first time publicly and only after CP submitted notice of its intent to propose the shareholder resolution, a conditional willingness to engage with CP, stating that "in the event that [CP] addresses [Norfolk Southern's] concerns by receiving a declaratory order from the STB validating its proposed voting trust structure and indicates a willingness to meaningfully increase the value represented by its proposal, Norfolk Southern would be willing to enter into good faith discussions with [CP] regarding the potential combination of the two companies."
To date, NS has refused to meet with CP to discuss the merits of a potential transaction.
"CP is seeking a declaratory order from the Surface Transportation Board and we have consistently indicated that we are open to discussing the terms of our previous offers," Harrison said. "With a vote 'for' the shareholder resolution, we hope to get NS to the table to discuss all the elements of the proposed business combination in an open and constructive manner."
CP is making no recommendation concerning any other matter to be brought before NS' Annual Meeting, for which a date has yet to be set.
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