Eastern Railroad Discussion > CP waiting on response from NS

NS is going to have to do something or sharholders will sue 

http://www.theglobeandmail.com/report-on-business/cp-still-waiting-on-response-from-norfolk-southern-on-takeover-offer/article27466696/



Edited 1 time(s). Last edit at 11/25/15 13:50 by 1.

They're doing something by NOT doing something. They really should explain the game Harrison and Ackman are playing though. When they walk away after cashing in their inflated stock post-merger, there won't be much of a railroad left.

Usually the target (NS) will hire a banker to evaluate the offer for the board's guidance.  You can stretch that process for a few weeks if you want to

1 Wrote:
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> NS is going to have to do something or sharholders
> will sue 
>
> http://www.theglobeandmail.com/report-on-business/
> cp-still-waiting-on-response-from-norfolk-southern
> -on-takeover-offer/article27466696/


The way I read this article, CP is still waiting for a response to their initial lowball bid. The exact one the NS  said is low...

 

I wonder if they'll say "hell no" in Canadian or with a Southern drawl?

As to lawsuits: guaranteed.  If there's any kind of deal, lawyers will "investigate."

BobE

The Canadian press has failed to mention that any acquisition of NS by CP would have to be approved by the United States STB.  They have further failed to mention that a serious impediment to approval is the fact that foreign ownership of this major rail infrastructure would be contrary to the national interests of the United States of America.
ALLEN
 
1 Wrote:
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> NS is going to have to do something or sharholders
> will sue 
>
> http://www.theglobeandmail.com/report-on-business/
> cp-still-waiting-on-response-from-norfolk-southern
> -on-takeover-offer/article27466696/

CP wants to idle 40 % of NS locomotives and sell all the real estate plus any unused yards. Don't sound like a good ideal to this NS employee.

Posted from Android

NSDTK Wrote:
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> CP wants to idle 40 % of NS locomotives and sell
> all the real estate plus any unused yards. Don't
> sound like a good ideal to this NS employee.

How does the current NS operating ratio sound to you?
 
http://www.trainorders.com/discussion/read.php?2,3895238,3896458#msg-3896458

Ray

Ray_Murphy Wrote:
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> NSDTK Wrote:
> --------------------------------------------------
> -----
> > CP wants to idle 40 % of NS locomotives and
> sell
> > all the real estate plus any unused yards.
> Don't
> > sound like a good ideal to this NS employee.
>
> How does the current NS operating ratio sound to
> you?
>  
> http://www.trainorders.com/discussion/read.php?2,3
> 895238,3896458#msg-3896458
>
> Ray

Current NS as well as CSX operating ratios are due to the severe downturn in coal traffic; you should know this.  If it were not for the excellent management of these roads, the situations would be even worse.  A takeover by foreigners is not the answer, and is not in the national interest of the United States.
ALLEN

NSDTK Wrote:
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> CP wants to idle 40 % of NS locomotives and sell
> all the real estate plus any unused yards. Don't
> sound like a good ideal to this NS employee.
>
> Posted from Android

It's not a good deal for ANY NS employee.  You are about the work for Pisser Bill Jr.  Ask the old heads from Frisco and BN about William "Pisser Bill" Thompson, then remember EHH was his protege.  Judging from current day CN and CP stories, EHH was a star student of his former master.

I love all the people who protest and say it will never happen.  STB wont allow.  Foreign ownership can't be aloud to take over a US road, etc., etc., etc.  Folks, NONE OF THAT MATTERS.   I doubt CPand NS ever merge.  And I think that IF the merger does happen, it's just the cherry on top of the Sunday.  The real target is NS's assets.   Bill Ackman (Pershing Square) is what today is called an activist investor.  In the 90's they where called Corporate Raiders.  They feel that the individual value of NS's assets, especially "Idle" assest like real estate, is GREATER than the value of the company as a whole.  As an activist investor, it is his calling to unlock that value for all stockholers. 

Pershing Square is NOT going to buy all of NS's stock - they are just after enough to get their plan on how to operate the company and their slate of directors on a ballot to all stockholders.  It is then up to the stockholders to choose to stay the cource or go with Ackman.   This is perfectly legal - thumping your chest about we can not allow a US railroad to fall into foreign hands is meaningless.  Other than assuring no SEC, IRS, or DOJ regulations are broken, which these guys are masters at, there is very little that the government could dp to stop this.  YES, the STB CAN stop the merger.  SO WHAT?  Achman would have already won.  EHH has already said that if  NS agrees to move forward with the merger (likely becasue Pershing gains control of the board), NS will be placed into a trust to ensure it operates 100% independently from CPRS while the merger application works it's way through regulatory agencies.  EHH will resign from CPRS to head the new NS trust. 

So what if the STB says no - big deal, Pershing will just dump it's CPRS investment, and EHH will sharpen his hatchet and start cutting the "fat" at NS, just like he's and his mentor have done to other roads over the past 40 years.  The stockholders are the only ones that can stop this.  Problem is, over 70% of NS stock belongs to "Institutional" owners.  MANY of these funds and groups have been involved in companies that Ackman has visited in the past, and they've usually put a good amount of money in their pockets as a result.  This is why you see rpeorts that while NS management is against "merger", the stockholder are interested. 

 

Foreign ownership?  How about CN?  Seems like they own the IC, the DM&IR, the GTW, the WC, the EJ&E, and who knows what else.  I don't think CN stands for Chili Noodles.

This simply is not a slam dunk can’t miss for CP.

Expect NS management, at some point, to announce a plan to improve value for shareholders. (They can sell surplus assets and reduce expenses just as well as those targeting the company.) Their plan could be multi-faceted including forming a real estate holding company with the shares being issued to NS shareholders. This is how the company I worked for fended off a hostile takeover; they offered more value to the shareholders than the raiders did.

STB does matter. They can secure a Federal Court injunction(s) to halt the CP purchase of NS shares and/or placement of CP appointees on NS board.

ALLEN

krm152 Wrote:
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> This simply is not a slam dunk can’t miss for
> CP.
>
> Expect NS management, at some point, to announce a
> plan to improve value for shareholders. (They can
> sell surplus assets and reduce expenses just as
> well as those targeting the company.) Their plan
> could be multi-faceted including forming a real
> estate holding company with the shares being
> issued to NS shareholders. This is how the company
> I worked for fended off a hostile takeover; they
> offered more value to the shareholders than the
> raiders did.
>
> STB does matter. They can secure a Federal Court
> injunction(s) to halt the CP purchase of NS shares
> and/or placement of CP appointees on NS board.
>
> ALLEN

That's a thoughtful and considered comment.  Ultimately, value for the company's owners will make the case for or against this or any offer. 

I mentioned on the other thread that the Fred Green administration at CP did not do a good job in creating value for the company's owners. So, the investor iowners fired him and his Bay Street buddies.

Nobody seriously views the Moorman etc legacy management team as anywhere that bad. But, any pension fund, college endowment, 401k investment, mutual fund, etc should be asking questions about whether NS is doing the best job it can.  There's a fine line between being an honorable and decent company, treating its employees well, and a company that won't react to changing conditions with serious adjustments, line sales, REIT creation, etc

You're all assuming that NS may not be working on a better deal, with one of its western counterparts.  Nothing would take the wind out of Ackman and EHH's sails quicker, than NS announcing that it has reached a mutual agreement with another US-based carrier, toward a merger with far more equitable terms.

If NS comes calling ... I don't think either BNSF or UP would turn them down.  Neither one wants to be "last man standing" if CP gobbles up NS, and leaves only CSX as the last major player in the east.

Personally I'm waiting on KCS - NS.

Posted from Android

I expect that every class 1 is spread sheeting different possible outcomes. Probably a few nonrail firms, too

The real question is how does the business produce a higher stream of income and return on assets

Posted from Android