CP files proxy for shareholder resolution at NS' annual meeting

Canadian Pacific yesterday filed with the U.S. Securities and Exchange Commission a shareholder resolution that will ask Norfolk Southern Corp.'s board to engage in "good faith discussions" regarding CP's proposed merger with NS.

CP also filed a letter that will be sent to NS shareholders in which the Canadian Class I describes what it believes would be the merger's value to shareholders.

CP's filings follow NS' move to encourage its employee shareholders to reject CP's resolution at the NS annual meeting scheduled for May 12. In a letter to employees yesterday, NS Chief Executive Officer Jim Squires noted the company's progress toward its five-year strategic plan to streamline operations and increase profit. In the letter, Squires asked employees to vote against the resolution.

On Monday, NS also filed a proxy stating CP's shareholder proposal is unnecessary because the NS board would be willing to start merger discussions if CP obtains a declaratory order from the Surface Transportation Board and is willing to increase its offer.

"CP has consistently stated that we are open to discussing all terms of a potential deal, including price, but we can’t negotiate with ourselves," said CP Chief Executive Officer E. Hunter Harrison in a press release issued yesterday. "Given we have also asked the Surface Transportation Board for a declaratory order on the voting trust model we were pleased to hear that Norfolk Southern may now be willing to engage in direct face-to-face discussions."