Norfolk Southern Corp. has unanimously rejected Canadian Pacific’s proposal to acquire the company for $32.86 in cash, a fixed exchange ratio of 0.451 shares in a new company that would own Canadian Pacific and Norfolk Southern, and 0.451 of a contingent value right.
The board of Norfolk Southern has unanimously determined that the latest revised proposal is “grossly inadequate, creates substantial regulatory risks and uncertainties that are highly unlikely to be overcome, and is not in the best interest of the company and its shareholders,” according to a letter by E. Hunter Harrison, CP’s CEO, and Andrew F. Reardon, chairman of the board. “This would be the case even if the CVR had a value at the high end of the range suggested in your publicly filed presentation. In fact, our financial advisors believe that the CVR would trade at a significant discount.”
The letter said CP has not addressed the significant regulatory issues that it previously identified. “We do not believe that your voting trust structure would be approved,” the letter stated.
Norfolk Southern Corp. has unanimously rejected Canadian Pacific’s proposal to acquire the company for $32.86 in cash, a fixed exchange ratio of 0.451 shares in a new company that would own Canadian Pacific and Norfolk Southern, and 0.451 of a contingent value right.
The board of Norfolk Southern has unanimously determined that the latest revised proposal is “grossly inadequate, creates substantial regulatory risks and uncertainties that are highly unlikely to be overcome, and is not in the best interest of the company and its shareholders,” according to a letter by E. Hunter Harrison, CP’s CEO, and Andrew F. Reardon, chairman of the board. “This would be the case even if the CVR had a value at the high end of the range suggested in your publicly filed presentation. In fact, our financial advisors believe that the CVR would trade at a significant discount.”
The letter said CP has not addressed the significant regulatory issues that it previously identified. “We do not believe that your voting trust structure would be approved,” the letter stated.
