http://phx.corporate-ir.net/phoenix.zhtml?c=64379&p=irol-newsArticle&ID=997164&highlight=
Florida East Coast Industries to Be Acquired By Funds Managed By Fortress Investment Group LLC in an All-Cash Transaction Valued at $3.5 Billion.
Read the story for known details. Lots of activity here in Jax.
Impact on FEC Railway unknown at this time, but speculation abounds…
Heard about this earlier today. FECI has been rumored to be a takeover target for a few months now. Interesting that Fortress Investments which recently took over Rail America is the acquirer.
LC
That is interesting…
It will be interesting to see how this passes regulatory muster with the STB. As has been mentioned elsewhere, investment funds of various types have a lot of money floating around so it remains to be seen if similar deals will be made for other shortline groups and regional roads.
Fortress is the same company that purchased Rail America. Looks like they are building a rail empire.
ed
I am always fearful when I hear of Equity investment type companies buying transportation companies and then throwing out the term ‘maximize shareholder return’. I still remember the movie ‘Wall Street’.
I think LC and I are wondering if this is about to become another quirky KCS saga.
True. Also, at the rate they are going it could become THE KCS SAGA…
LC
If you ask me, this will this will signal the end of an independent FEC. Most likely, RailAmerica will be forced to take it over.
Speculation does abound… Interesting, it is, that a NS business car was spotted making the rounds recently. Of course, could have been (?) reasons for that.
CSX could never get approval to own FEC due to competition reasons.
KCS - intereted in FEC - umm…now that would be interesting and fit their persona - there may be more to that…
I can’t see Rail America handling FEC - FEC is not a short line. It could be in the Family, but would require the same management presently there (IMHO).
An end to a Independent FEC would be… heartbreaking…
I am wondering if NS will put in a competing bid for the line. It would certainly fit quite nicely into their system. Of course, they never had to up to this point as FEC could simply act as an extention of NS. But now…with control going to the Private Equity group Fortress, this might make them consider that they might own the cow in order to milk the cow.
Dont know much about the NS/FEC relationship, but on the map it looks good.
ed
I don’t think that NS will put in a competing bid for FEC at this time, it could lead to overpaying for FEC. They will probably keep in contact with the hedge fund that now owns FEC and negotiate a sale price when the hedge fund is ready to unload the property a few years from now.
Good point Paul.
I seriously doubt if NS would be interested in getting too involved with another takeover situation. They have just about digested Conrail. Still, I wouldnt think it would be a real comfortable situation with FEC no longer being independent.
ed