Newspaper article Charleston Gazette Mail

CP Drops Proxy Fight in Bid for Norfolk Southern

Newspaper article Charleston Gazette Mail

CP Drops Proxy Fight in Bid for Norfolk Southern

Article excerpt

Canadian Pacific Railway Ltd. will ask Norfolk Southern Corp. shareholders to pressure the U.S. railroad's management and board into starting merger talks, dropping plans for a proxy fight. Canada's second-largest railroad said it plans to submit a resolution to Norfolk Southern investors requesting that the board "engage in good faith discussions. The board has rejected several approaches, including one in December that valued the U.S. company at $27 billion.

"We are simply asking them to vote in favor of having their board talk to us, Chief Executive Officer Hunter Harrison said in a statement Tuesday. "We continue to believe in the potential to create a transcontinental railroad with NS and believe this is a fair and measured approach to getting a deal done.

Acquiring Norfolk Southern would allow Harrison to create a coast- to-coast railroad that eliminates rail-car exchanges between the carriers and would enable him to apply his efficiency expertise to Norfolk Southern, which lags behind other large carriers in key service measures.

Although some Norfolk Southern investors asked to nominate an alternative slate of directors, "this shareholder resolution is the clearest, fairest approach to a process that will result in an outcome beneficial to all stakeholders, Canadian Pacific said. …

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