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Because stock offering-related costs are rising and trading activity is decreasing, Pioneer Railcorp officials believe the short-line holding company should exit the small-cap stock market. So, Pioneer's board recently approved a private merger transaction under which holders of 2,000 shares or less of the company's common stock would receive $2.85 in cash per share. Owners of more than 2,000 shares would continue to hold their shares.

The proposed transaction — which is subject to shareholder approval — is designed to reduce the number of stockholders to less than 300 and remove Pioneer's requirement to file periodic reports with the Securities and Exchange Commission (SEC). If the transaction is completed, Pioneer no longer will register its stock with the SEC and list shares on the NASDAQ SmallCap Market.

Officials of the company — which owns and operates 16 short lines — plan to schedule a special meeting in first-quarter 2005 to discuss the transaction with shareholders.