Report : Canadian Pacific Expected To Revise Terms Of Offer For Norfolk Southern

(RTTNews) - Canadian Pacific Railway Ltd (CP, CP.TO) is expected to revise terms of its about $30 billion bid for rival Norfolk Southern Corp. (NSC) as soon as Tuesday, the Wall Street Journal reported citing people familiar with the matter.

Canadian Pacific, seeking to overcome Norfolk Southern's rejection of its bid last week, is expected to offer $32.86 in cash and 0.451 of a share in a new holding company that would run the two railways independently until the Surface Transportation Board rules on the merger, the report said. Canadian Pacific's previous offer would have paid $46.72 cash and 0.348 shares in the combined railroad for each Norfolk share.

Shareholders could be paid as soon as May, the report said, provided the regulator approves a temporary trust structure that would keep the two railways independent during the regulatory review, which could take up to two years.

Separately, Norfolk Southern announced that former Surface Transportation Board or "STB" commissioners Francis Mulvey and Charles Nottingham reviewed voting trust issues and the merger transaction proposed by Canadian Pacific and agree with the Norfolk Southern board of directors that both would be highly unlikely to be approved by the STB.

"the Company retained nationally recognized regulatory counsel and former STB commissioners to carefully evaluate the regulatory landscape under the 2001 merger rules. The former STB commissioners have concluded that the STB would be highly unlikely to approve a voting trust structure or the merger transaction, as neither would be in the public interest. The Norfolk Southern board remains confident that the continued execution of its strategic plan is superior to Canadian Pacific's grossly inadequate and high-risk proposal," said Chairman, President and CEO James A. Squires.