CP's latest offer doesn't address regulatory risks, uncertainties, NS says

Norfolk Southern Corp.'s board will consult with its financial, legal and regulatory advisers to "carefully consider" Canadian Pacific's latest takeover offer, NS officials announced yesterday.

The only difference in CP's latest proposal from the last offer is the inclusion of a contingent value right (CVR), NS officials said in a press release. Yesterday's proposal did not change terms of CP's Dec. 7th offer, which the NS board rejected unanimously, and did not address "substantial regulatory risks and uncertainties inherent in the proposed combination," the release stated.

"As Norfolk Southern previously stated, if Canadian Pacific is confident that its proposed voting trust structure works, Canadian Pacific can seek a declaratory order to that effect from the STB now," according to NS' statement. "The [Surface Transportation Board] has clear, statutorily-established authority to issue declaratory orders to remove uncertainty, and there is precedent for it doing so in the voting trust context."

NS' financial advisers on the matter are Morgan Stanley & Co. LLC and Bank of America Merrill Lynch. For legal advice, NS is working with Skadden, Arps, Slate, Meagher & Flom LLP, Hunton & Williams LLP, and Morrison & Foerster LLP.