CP Offers To Buy Norfolk Southern; Norfolk Southern Says Reviews Low-premium Bid

(RTTNews) - Canadian Pacific (CP, CP.TO) said that it has sent an offer letter to Norfolk Southern Corp. (NSC) proposing a business combination. The proposal includes a sizable premium in cash and stock offered to Norfolk Southern shareholders.

CP strongly believes that the combined railroad would offer unparalleled customer service and competitive rates that will support the success of the shippers and industries it serves, and satisfy the U.S. Surface Transportation Board and Canadian regulators.

CP said it hopes the Norfolk Southern executive leadership team and the Board of Directors give this offer due consideration, and looks forward to a thoughtful dialogue on creating a new industry leader.

Separately, Norfolk Southern confirmed that it has received an unsolicited, low-premium, non-binding and highly conditional indication of interest from Canadian Pacific to acquire the Company for $46.72 in cash and a fixed exchange ratio of 0.348 Canadian Pacific shares per Norfolk Southern share, representing a premium of less than 10% based on closing prices today.

Norfolk Southern's board will carefully evaluate and consider this indication of interest in the context of Norfolk Southern's strategic plans, and its ongoing review of opportunities to enhance stockholder value through strategic, financial and operational measures and pursue the best interests of the Company and its stockholders.

Norfolk Southern stated that any consolidation among Class I railroads in North America would face significant regulatory hurdles. Norfolk Southern's board of directors and management team are committed to enhancing value for all stockholders. The Company's stockholders do not need to take any action at this time.