Proposed combination of CP and NS to deliver
significant value to shareholders and significant benefits for
customers, competition and the economy
CALGARY, Feb. 9, 2016 /CNW/ - Canadian Pacific (TSX:CP)
(NYSE:CP) today notified Norfolk Southern Corp. (NS) of its intent
to submit a resolution to NS' shareholders to ask their board of
directors to engage in good faith discussions with CP regarding a
business combination transaction involving CP and NS that would
create a true end-to-end transcontinental railroad that would
enhance competition, benefit the public and drive economic
growth.
NS shareholders have been telling CP from the beginning that
their own board should, at the very least, talk to CP about a
potential combination. CP's shareholder resolution to NS asks
shareholders to formally vote in favour of what they have been
saying to CP anecdotally for months.
Further, while some NS shareholders have asked CP to nominate an
alternative slate of directors for the NS board to help initiate a
transaction, we believe this shareholder resolution is the
clearest, fairest approach to a process that will result in an
outcome beneficial to all stakeholders.
"We are not asking NS shareholders to vote on the existing
proposal; we are simply asking them to vote in favour of having
their board talk to us," said E. Hunter
Harrison, CP's Chief Executive Officer. "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."
The shareholder resolution will be voted on at the NS annual
meeting later this year. NS' prior annual meeting was held on
May 14, 2015.
CP's proposal to NS, which includes a sizable premium in cash
and stock offered to NS shareholders, would result in a company
with the potential for faster earnings growth than either CP or NS
could achieve on their own, all while delivering enhanced service
to customers and maintaining a strong investment grade credit
rating.
"Shareholders and analysts will be watching NS closely
throughout 2016 and if they continue to underperform, the pressure
to work with CP will only grow," said Harrison. "Our model performs
in good times and bad, consistently driving shareholder value
during the peaks and the valleys – surely that kind of performance
is what shareholders would expect their board to deliver and they
can only deliver it by working with us."
CP strongly believes that a combined railroad would offer
unparalleled customer service and competitive rates that will
support the success of the shippers and industries it serves, and
satisfy the U.S. Surface Transportation Board and Canadian
regulators. In direct discussions with NS, CP could also be able to
work with NS on the optimal means to obtain regulatory approvals
for the transaction.
Forward Looking Statement
This news release contains certain forward-looking information
within the meaning of applicable securities laws relating, but not
limited, to CP's proposal to NS regarding a possible business
combination, CP's shareholder proposal to NS, the anticipated
results and benefits of the proposed transaction and matters
relating to regulatory approvals and changes. This forward-looking
information also includes, but is not limited to, statements
concerning expectations, beliefs, plans, goals, objectives,
assumptions and statements about possible future events,
conditions, and results of operations or performance.
Forward-looking information may contain statements with words or
headings such as "financial expectations", "key assumptions",
"anticipate", "believe", "expect", "plan", "will", "outlook",
"should" or similar words suggesting future outcomes.
Undue reliance should not be placed on forward-looking
information as actual results may differ materially from the
forward-looking information. Forward-looking information is not a
guarantee of future performance. By its nature, CP's
forward-looking information involves numerous assumptions, inherent
risks and uncertainties that could cause actual results to differ
materially from the forward-looking information, including but not
limited to the following factors: the ability of the parties to
agree to the terms of a proposed transaction; the ability of the
parties to obtain the required regulatory approvals; the ability to
recognize the financial and operational benefits of the
transaction; changes in business strategies; general North American
and global economic, credit and business conditions; risks in
agricultural production such as weather conditions and insect
populations; the availability and price of energy commodities; the
effects of competition and pricing pressures; industry capacity;
shifts in market demand; changes in commodity prices; uncertainty
surrounding timing and volumes of commodities being shipped via CP;
inflation; changes in laws and regulations, including regulation of
rates; changes in taxes and tax rates; potential increases in
maintenance and operating costs; uncertainties of investigations,
proceedings or other types of claims and litigation; labour
disputes; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; currency and interest rate fluctuations;
effects of changes in market conditions and discount rates on the
financial position of pension plans and investments; and various
events that could disrupt operations, including severe weather,
droughts, floods, avalanches and earthquakes as well as security
threats and governmental response to them, and technological
changes. The foregoing list of factors is not exhaustive.
These and other factors are detailed from time to time in
reports filed by CP with securities regulators in Canada and the United States. Reference
should be made to "Management's Discussion and Analysis" in CP's
annual and interim reports, Annual Information Form and Form 40-F.
Readers are cautioned not to place undue reliance on
forward-looking information. Forward-looking information is based
on current expectations, estimates and projections and it is
possible that predictions, forecasts, projections, and other forms
of forward-looking information will not be achieved by CP. Except
as required by law, CP undertakes no obligation to update publicly
or otherwise revise any forward-looking information, whether as a
result of new information, future events or otherwise.
No Offer or Solicitation
This announcement is neither an offer to purchase or exchange
nor a solicitation of an offer to sell securities. Subject to
future developments, additional documents, including one or more
proxy statements in connection with the solicitation of proxies for
the 2016 annual meeting of NS shareholders, regarding the proposed
transaction may be filed with the SEC. Investors and security
holders are urged to read such disclosure documents regarding the
proposed transaction, including any proxy statement, if and when
they become available, because they will contain important
information. Investors and security holders may obtain a free
copy of the disclosure documents (when they are available) and
other documents filed by CP with the SEC at the SEC's website at
www.sec.gov. The disclosure documents and these other documents may
also be obtained for free from CP at http://www.cpr.ca/en/investors
or by directing a request to Canadian Pacific Railway Limited, 7550
Ogden Dale Road S.E., Calgary, Alberta,
Canada, T2C 4X9, Attention: Office of the Corporate
Secretary.
CP and its directors, executive officers and other employees may
be deemed to be participants in any solicitation of CP or NS
shareholders in connection with the proposed transaction.
Information about CP's executive officers and directors is
available in CP's Annual Report on Form 40-F for the year ended
December 31, 2014, which was filed
with the SEC on February 23, 2015.
Additional information about the interests of potential
participants will be included in any proxy statement filed in
connection with the proposed transaction.
About Canadian Pacific
Canadian Pacific (TSX:CP)(NYSE:CP) is a transcontinental railway
in Canada and the United States with direct links to eight
major ports, including Vancouver
and Montreal, providing North
American customers a competitive rail service with access to key
markets in every corner of the globe. CP is growing with its
customers, offering a suite of freight transportation services,
logistics solutions and supply chain expertise.
Visit cpr.ca to see the rail advantages of Canadian
Pacific.
SOURCE Canadian Pacific