Canadian Pacific CEO: Options 'Shorter' for Takeover of Norfolk Southern

By Jacquie McNish 

Canadian Pacific Railway Ltd.'s options for winning a hostile bid for Norfolk Southern Corp. are "becoming shorter and shorter," its chief executive said Wednesday.

Citing Norfolk Southern's refusal to enter talks and mounting opposition to the proposed deal from politicians, customers and competitors, Canadian Pacific CEO Hunter Harrison said at a transportation conference in Coral Gables, Fla., that the future of the tie-up now rests with the Virginia-based railroad operator's shareholders.

Canadian Pacific first announced the proposal, currently valued at close to $30 billion, in November.

Canadian Pacific backed away this week from its earlier threats to replace Norfolk Southern directors through a proxy battle. The Calgary, Alberta-based railway instead opted to submit a nonbinding proxy resolution at Norfolk Southern's annual meeting to seek shareholder support for merger discussions. The date of the meeting hasn't been set.

At the conference, Mr. Harrison rebuked executives of some U.S. railways for speaking out against mergers after Canadian Pacific launched its offer to create the country's first transnational railway.

Canadian Pacific alleged in January in a complaint to the Justice Department that executives from major railways, including Union Pacific Corp. and CSX Corp., acted together to thwart the deal. Union Pacific disputed the allegation. CSX declined to comment.

U.S. railways have become "fat and sassy" about competition and it was "wrong" for competitors to oppose a merger that he believes will improve delivery times and costs, Mr. Harrison told the conference.

Write to Jacquie McNish at [e-mail]

(END) Dow Jones Newswires

February 10, 2016 18:11 ET (23:11 GMT)

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