Norfolk Says Ackman Isn’t Good Enough


Norfolk Southern rejects the updated take over from Canadian Pacific Railway. Norfolk says that CP’s offer provides even less value and more uncertainty than the prior one.

The new offer was to give Norfolk shareholders a 47 percent stake in the new company (up from 41 percent) and $32.68 a share in cash (down from $46.72). The deal values NSC at ~90 a share.

Norfolk said: “Canadian Pacific’s revised, reduced proposal is not only less than what the Norfolk Southern board has already found to be grossly inadequate, it is even more uncertain and risky given the decrease in the cash consideration.”

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Canadian Pacific may now go active and take the offer directly to shareholders. Canadian Pacific believes the deal actually offers $125 to $140 a share in value to Norfolk shareholders and a ~40 percent premium to today’s prices.

Bill Ackman, owner of ~9 percent of Canadian Pacific, said “We think it is likely it gets approved.” Norfolk shareholders of choosing between its current CEO or Hunter Harrison, who turned around Canadian Pacific.

“The current CEO Mr. Squires does not have a proven track record for turning around railroads,” Ackman said.

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