Canadian Pacific wants vote on Norfolk Southern deal

OMAHA, Neb. -- Canadian Pacific plans to ask Norfolk Southern shareholders whether they want the two railroads to pursue a merger.

See Full Article

Canadian Pacific said Tuesday that it plans to submit a shareholder resolution on a possible deal at Norfolk Southern's annual meeting this spring. But it doesn't plan to nominate its own slate of directors to press the issue.

Norfolk Southern officials didn't immediately respond Tuesday afternoon.

Norfolk Southern has sternly rejected all of Canadian Pacific's takeover offers even as they approached roughly $30 billion. Norfolk Southern has said the offers have been so "grossly inadequate" that there wasn't much point in discussing a possible deal.

Canadian Pacific has said combining its railroad with Norfolk Southern would create a more efficient operation that could haul more freight and grow profits faster than either railroad could alone. CP also predicts that it could cut roughly $1.8 billion in annual costs.

"Shareholders and analysts will be watching NS closely throughout 2016 and if they continue to underperform, the pressure to work with CP will only grow," said Harrison. "Our model performs in good times and bad, consistently driving shareholder value during the peaks and the valleys."

Norfolk Southern executives have said they believe the railroad will fare better if it remains independent. They have released their own plan to cut about $130 million in costs this year and more than $650 million in annual cost savings by 2020.

Canadian Pacific said it doesn't plan to ask Norfolk Southern shareholders to vote on its most-recent proposal. Instead, it will just ask them to support having the two railroads hold merger talks.

Even if the railroads agreed on a deal, the proposal would still have to clear major regulatory hurdles. The U.S. Surface Transportation Board hasn't approved any major rail mergers since it approved tough rules for them in 2001.

Norfolk Southern officials have said they don't believe regulators would approve such a merger, but Canadian Pacific officials remain optimistic a deal could be approved.

Shares of Norfolk Southern Corp., which is based in Norfolk, Virginia, rose $1.50, or 2.1 per cent, to $71.99 in afternoon trading Tuesday. Its shares are down 33 per cent in the past year.


Latest Economic News

  • Women won't earn as much as men for 170 years: report

    Economic CTV News
    GENEVA -- The global gap in earnings between men and women will not be closed for another 170 years if current trends continue, according to a new report from the World Economic Forum. The Switzerland-based forum's annual Global Gender Gap Report, released Tuesday, lists economics and health as the most challenging disparities between men and women worldwide. Source
  • CIBC admits overcharging on some investment fees since 2002

    Economic CBC News
    CIBC accidentally overcharged some of its customers for investment products dating back to at least 2002. (Nathan Denette/Canadian Press) CIBC has settled with the Ontario Securities Commission after admitting that its investment business had been accidentally overcharging some of its customers for as much as 14 years. Source
  • CIBC plans to compensate mutual fund, investment clients; OSC hearing Friday

    Economic CTV News
    TORONTO - Canadian Imperial Bank of Commerce (TSX:CM) has reached an agreement with the Ontario Securities Commission to compensate customers for collecting excess fees for certain mutual funds and investment services over 14 years. Details of the compensation plan and the amount of money improperly collected was not disclosed and requires approval by the provincial regulator. Source
  • Apple designer Marc Newson's 'Pod of drawers' sells for more than $1M

    Economic CTV News
    A chest of drawers by the star Australian designer Marc Newson has sold at auction in Paris for more than one million euros, more than twice its estimate. The piece called "Pod of drawers" by the creator who has worked for Apple for the past decade, was bought for 1.019 million euros ($1.1 million) by an Asian buyer, the auction house Artcurial said Tuesday. Source
  • Ericsson names new CEO amid declining networks industry

    Economic CTV News
    STOCKHOLM -- Swedish mobile networks company Ericsson said Wednesday it has named longtime board member Borje Ekholm as its new CEO, in a bid to turn around the company amid a decline in the industry. Source
  • First the penny, now the nickel? Ottawa mulls future of 5-cent coin

    Economic CBC News
    An internal federal analysis shows the government has studied the pros and cons of the nickel — but Ottawa insists it has no plans to force the five-cent coin into retirement, as it did the penny. Source
  • Apple's quarterly sales fall, but forecast calls for gains

    Economic CTV News
    SAN FRANCISCO - Apple says it sold 45.5 million iPhones in the last quarter, 5 per cent fewer than it sold a year earlier. But the giant tech company's rosy forecast for the holidays was better than what Wall Street had been expecting. Source
  • Pokemon Go boost limited as Nintendo cuts profit forecast

    Economic CTV News
    TOKYO -- Japanese video game maker Nintendo Co. has slashed its operating profit and sales forecasts for this fiscal year, despite the global success of "Pokemon Go." The maker of Super Mario games and the Wii U console said Wednesday that it booked a 62.7 billion yen ($601.7 million) gain in April-September from its sale of the Seattle Mariners Major League Baseball team. Source
  • In leaked speech, Britain's May warned of Brexit damage

    Economic CTV News
    LONDON - A leaked recording of a speech by Theresa May sheds some light on the depth of the prime minister's opposition to taking Britain out of the European Union before the referendum earlier this year. Source
  • A $31B problem: How Canada sucks at reducing food waste

    Economic CBC News
    France has made it illegal for supermarkets to waste food, and Italy is offering tax breaks when businesses donate leftovers. But a policy that addresses food waste in Canada won't be in place any time soon. Source