Can someone who has more insight on the market and financials briefly explain what would happen to the stocks of each company if this goes through? I read that NS stock could get to high as $140-$160 a share. What is going on with CP stock during this time and at what point do both stocks become one? I read that after the merger is complete the new company would have a value of $240 a share. How is this number decided? Add both stocks together? Thanks!
The Justice Department currently does not have any jurisdiction over railroad mergers. That doesn’t mean the law could’t be changes, but right now railroad mergers are 100% an STB decision.
Shipping community not in favor of CP-NS merger
i agree the Justice Dept. directly does not have jurisdiction over rail mergers. However, consider the Board of the STB. One is a labor lawyer who represented those interests in transportation matters. The second is a longtime Republican staffer in Congress with experience in transportation matters, in particular the mechanics of deregulation. The third is a Democrat from Kansas, where she served in several governmental positions related to transportation.
Given how Washington works, that is probably more expertise in the area being regulated than exists in other administrative bodies. However, if you believe those folks don’t have their fingers in the air regarding the direction of the political winds, you are far more trusting of the regulatory state than I.
I agree that approval of mergers is strictly an STB decision. However, I believe the Justice Dept. can intervene in a merger applicaton, and present its arguments why the merger shouldn’t be approved, mainly such as the anti-competitive efffects. And even if the Justice Dept. can’t or won’t intervene, the states and shipper groups can - and often do - present that same objection
- Paul North.
Yup. Understand the intervenors. Spent some time in the electric industry.
Try reading some of Fred Frailey’s blog posts.
Matt Rose at BNSF has spoken on the proposed CP - NS merger.
What will the Union Pacific say?
What did Matt Rose have to say?
The railroad controlled by Warren Buffett’s Berkshire Hathaway Inc. is open to making a competing bid for Norfolk Southern Corp., the target of a $27 billion takeover effort by Canadian Pacific Railway Ltd.
While BNSF Railway Executive Chairman Matt Rose doesn’t favor more North American rail mergers, he said Thursday that the company won’t sit on the sidelines in any fresh dealmaking and could jump in to pursue Norfolk Southern…
Yessss! [8D]
Are you advocating black and orange locomotives? The emblem could be a galloping stallion with a pumpkin on it’s head.
No - make it the old CBQ colors - black w/white or red pin stripes.
Actually I have thought for some time that a perfect merger would be BNSF and NS. Would give BNSF something in the east.
Burlington, Norfolk & Sante Fe - BNSF.
No repainting required on 7,000 or so locomotives.
So BNSF takeover of NS is good; CP takeover of NS is bad. Why?
I would opine that there is the presumption that CP would gut NS for the short term benefit, whereas BNSF would treat NS as an asset to grow business.
I could be wrong.
I think when you take a serious look at who is truly behind the merger, Bill Ackman, you will find the reason it is not a great idea. Ackman is in the same league as Carl Icahn when it comes to corporate raiding, taking his profit and leaving a shambles behind.
BNSF’s owners have enough of a checking account to save for a rainy day. Cp- I’m not sure of.
Okay, here’s my thing. Let’s suppose, just for the sake of argument here, that BNSF does indeed get involved in all this and it’s chief rival, UP, reluctantly decides that it has to join the game as well. NS’ chief competitor and rival, CSXT, certainly could not sit idle. So, if the East were to be parceled out between say, BNSF, CPRS and UP, exactly how might the “parceling out” go? Who would get the ex-PRR and ex-NYC Chicago - New York mainlines? What about the former B&O mainline? For that matter, could the former PRR segment from Crestline, OH westward through Ft. Wayne, IN and towards Chicago suddenly figure prominently again? Just trying to throw out all the possibilities here.
FWIW, I know in my heart that CPRS should be going after KCS instead but that’s another argument for another day.
I second your thoughts. Pump & Dump is Ackman’s modus oporandi. Buy, strip, take cash, leave debt ridden shell.
I think Confusus slogan is coming true. We are living in interesting times.