Monday, April 11, 2016

CP, Ackman call it quits

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Pershing Square Capital Management principal and CP shareholder Bill Ackman, whose efforts to acquire Norfolk Southern have been terminated. Pershing Square Capital Management principal and CP shareholder Bill Ackman, whose efforts to acquire Norfolk Southern have been terminated.

On Monday, April 11, 2016, Canadian Pacific Railway Ltd. terminated its efforts to merge with Norfolk Southern Corp.. This includes “withdrawal of a resolution asking NS shareholders to vote in favor of good-faith negotiations between the two companies,” CP sais. “No further financial offers or overtures to meet with the NS board of directors are planned at this time.”

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CP said that it “proposed the creation of a true end-to-end railroad that would enhance competition, ease freight congestion now and into the future, improve service to shippers, better support the economy and generate significant shareholder value for both companies.”

“We have long recognized that consolidation is necessary for the North American rail industry to meet the demands of a growing economy, but with no clear path to a friendly merger at this time, we will turn all of our focus and energy to serving our customers and creating long term value for CP shareholders,” said CP CEO E. Hunter Harrison.

CP reiterated that it “has a proven approach—precision railroading—that delivers superior results for customers, employees, communities and shareholders. CP will continue to focus on providing the best service, controlling costs, optimizing assets, operating safely and developing the best team of railroaders in the industry.”

Norfolk Southern responded by saying the railroad’s board and management “are committed to enhancing value for shareholders. Since the company’s new management team was appointed, Norfolk Southern has been focused on implementing a strategic plan to streamline operations, reduce expenses and maintain superior customer service levels. The Norfolk Southern team has made significant progress and is on track to achieve annual productivity savings of more than $650 million and an operating ratio below 65% by 2020. We are confident the continued execution of our plan will deliver superior value to all of the company’s stakeholders by best positioning Norfolk Southern to succeed. We thank our shareholders for their input and support throughout this process and our employees for their hard work and dedication to strengthening Norfolk Southern as a critical component of the nation’s transportation infrastructure.”

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