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Rail News: Canadian Pacific

CP asks STB to clarify voting trust issue, revives CSX talks

Canadian Pacific has petitioned the U.S. Surface Transportation Board (STB) for a declaratory order that would confirm the voting trust structure the railroad has proposed as part of its attempt to acquire Norfolk Southern Corp., CP officials announced yesterday.

The Class I filed the petition in response to CP and NS shareholder requests that the STB clarify its views on the voting trust model ahead of any formal application that CP would file, said CP Chief Executive Officer E. Hunter Harrison in a press release.

"Since we remain convinced that productive discussions about the potential structure and value of a formal bid must take place face to face, we hope this show of good faith is met with an equal demonstration on the part of NS," he said.

CP officials hope that the STB will be able to clarify its views on the voting trust structure so that shareholders from both companies can make an informed decision about the Class I's proposed merger, which would include the setting up of a voting trust.

Last month, CP asked NS shareholders to compel their board to meet with CP to discuss a potential merger. CP has made three offers to NS, all of which have been turned down.

Meanwhile, The Wall Street Journal reported Tuesday that CP attempted to revive merger talks with CSX Corp., but was rebuffed. CP first offered to acquire CSX in 2014, but was rebuffed then, too.

Although CP is committed to its proposed NS merger, CP sees value in creating a transnational railway and wants to keep its options open, the newspaper quoted Harrison as saying.

"We've said all along that if we looked at the synergies between the two eastern carriers, right now both of them would work for us," Harrison said, according to the newspaper.

Contact Progressive Railroading editorial staff.

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