NORFOLK, Va., Dec. 8, 2015 /PRNewswire/ -- Norfolk
Southern Corporation (NYSE: NSC) ("the Company") today confirmed
that it has received a revised, reduced proposal from Canadian
Pacific (TSX:CP) (NYSE:CP).
Norfolk Southern noted that Canadian Pacific's revised, reduced
proposal provides for a per share consideration of $32.86 in cash and a fixed exchange ratio of
0.451 shares in a new company that would own Canadian Pacific and
Norfolk Southern, and is valued at $91.62 based on Canadian Pacific's closing price
on December 7, 2015. The
consideration offered in this revised proposal is less than the
prior proposal, which the Norfolk Southern board unanimously
determined was grossly inadequate, creates
substantial regulatory risks and uncertainties that are
highly unlikely to be overcome, and is not in the best
interest of the Company and its shareholders.
On November 17, 2015, Canadian
Pacific made an unsolicited proposal to acquire all the outstanding
common shares of Norfolk Southern for $46.72 in cash and a fixed exchange ratio of
0.348 shares in a new company that would own Canadian Pacific and
Norfolk Southern. The total consideration of the initial proposal
is valued at $92.06 based on Canadian
Pacific's closing price on December 7,
2015. Following careful consideration with the assistance of
its independent financial and legal advisors, the Norfolk Southern
board unanimously rejected the prior proposal.
"Canadian Pacific's revised, reduced proposal is not only less
than what the Norfolk Southern board has already found to be
grossly inadequate, it is even more uncertain and risky given the
decrease in the cash consideration," said Chairman, President and
CEO James A. Squires. "In
addition to being grossly inadequate, the proposal is based on a
voting trust structure that we reviewed and do not believe would be
approved by the STB. Yesterday we released a white paper by two
former STB chairmen who believe that the STB would not approve any
voting trust structure because there is no basis to determine that
it would be in the public interest."
On December 7, 2015 Norfolk
Southern released a white paper by former Surface Transportation
Board ("STB") commissioners Francis Mulvey and Charles Nottingham in which they carefully
reviewed voting trust issues and the original merger transaction
proposed by Canadian Pacific. The former commissioners concluded
that, "As simple background, rail carriers cannot assume control of
another carrier without prior STB approval. The STB's
approval process can last between 19 and 22 months. Current
STB regulations, adopted in 2001, set a high bar for approval of a
proposed major merger and related voting trust based on an untested
public interest standard. In our expert opinions, the STB is
not likely to approve CP's proposed voting trust or the CP+NS
merger."
Morgan Stanley & Co. LLC and Bank of America Merrill Lynch
are acting as financial advisors to Norfolk Southern
Corporation and Skadden, Arps, Slate, Meagher & Flom
LLP, Hunton & Williams LLP and Morrison & Foerster
LLP are acting as legal advisors.
About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the nation's
premier transportation companies. Its Norfolk Southern Railway
Company subsidiary operates approximately 20,000 route miles in 22
states and the District of
Columbia, serves every major container port in the eastern
United States, and provides
efficient connections to other rail carriers. Norfolk Southern
operates the most extensive intermodal network in the East and is a
major transporter of coal, automotive, and industrial products.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of the safe harbor provision of the
Private Securities Litigation Reform Act of 1995, as amended,
including but not limited to statements regarding the indication of
interest made by Canadian Pacific Railway Limited. In some
cases, forward-looking statements may be identified by the use of
words like "believe," "expect," "anticipate," "estimate," "plan,"
"consider," "project," and similar references to the future.
Forward-looking statements are made as of the date they were first
issued and reflect the good-faith evaluation of the Company's
management of information currently available. These
forward-looking statements are subject to a number of risks and
uncertainties, many of which are beyond the Company's control,
including future actions that may be taken by Canadian Pacific
Railway Limited in furtherance of its unsolicited proposal.
These and other important factors, including those discussed under
"Risk Factors" in the Company's Form 10-K for the year ended
December 31, 2014, as well as the
Company's other public filings with the SEC, may cause our actual
results, performance or achievement to differ materially from those
expressed or implied by these forward-looking statements.
Forward-looking statements are not, and should not be relied upon
as, a guarantee of future performance or results, nor will they
necessarily prove to be accurate indications of the times at or by
which any such performance or results will be achieved. As a
result, actual outcomes and results may differ materially from
those expressed in forward-looking statements. We undertake no
obligation to update or revise forward-looking statements, whether
as a result of new information, the occurrence of certain events or
otherwise, unless otherwise required by applicable securities
law.
Contacts:
Media Inquiries:
Frank Brown, 757-629-2710
(fsbrown@nscorp.com)
Investor Inquiries:
Katie Cook, 757-629-2861
(InvestorRelations@nscorp.com)
or
Joele Frank / Dan Katcher / Andrew
Siegel
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
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visit:http://www.prnewswire.com/news-releases/norfolk-southern-comments-on-revised-reduced-proposal-from-canadian-pacific-300189594.html
SOURCE Norfolk Southern Corporation