Canadian Pacific's chief executive said Thursday he remains optimistic about completing a merger with Norfolk Southern but executives at the Virginia-based railroad haven't been willing to discuss the idea at length.....
Harrison said shareholders will be the ones who decide whether the deal moves forward, but he hopes he'll get a chance to sit down with Norfolk Southern executives.
"It's hard to resolve issues if you don't talk," Harrison said.
http://www.centredaily.com/news/business/article45509604.html
If NS does not wish to talk with Harrison, then what?
Victrola1 If NS does not wish to talk with Harrison, then what? Read more here: http://www.centredaily.com/news/business/article45509604.html#storylink=cpy
The CP then has to try to have NS stockholders vote in new members to the board of directors. These would be people who want to talk merger with the CP.
An "expensive model collector"
EHH on Bloomberg: He says today that NS would not say much to him face to face. He will communicate with Squires by e-mail today, looking at "driving shareholder value" concerns. He will not put a public number on that, but says efficiencies are the most important benefit. He has reached out to the major shareholders only so far, individually. Debt: take on $14 billion in new debt to buy NS - total meger cost is $28 billion. He sees serious problems in east with infrastructure. By merging end to end, they can create capacity by bypassing Chicago. He sees this as a great opportunity to improve NS's higher (than CP's) operating ratio. If they bypass the NS CEO, a voting trust would be established and putting in place new efficiencies, and then maybe getting STB approval in 2 years. He says he will see it through to completion and not retire until maybe 2018. Very interesting guy.
C&NW, CA&E, MILW, CGW and IC fan
Harrison may have to tighten the screws the way he and Ackman did at CP. Maybe the promise of another nuclear winter is in the offing..
Ulrich Harrison may have to tighten the screws the way he and Ackman did at CP. Maybe the promise of another nuclear winter is in the offing..
Well, that could be. But he seemed to place a lot of the efficiencies to be gained after merger by bypassing the Chicago bottlenecks.
You have to think NS is on the phone to BNSF and UP and-or vice-versa.
Berkshire Hathaway do a 50% cash and 50% stock deal at a price 15% higher and still have $30 billion or so in the bank and the new company would have no new debt to service.
Why would either BNSF or UP want to get into a bidding war for a somewhat distressed railroad like NS (or CSX) now?
kgbw49 You have to think NS is on the phone to BNSF and UP and-or vice-versa. Berkshire Hathaway do a 50% cash and 50% stock deal at a price 15% higher and still have $30 billion or so in the bank and the new company would have no new debt to service.
Warren B. is extremely savvy and I bet would see that such a merger would not be approved at the moment..Keep in mind B-H had to sell a large block of NS stock to gain approval for the acquisition of BNSF.
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
My take is that this is Ackman playing pump & dump tactics to increase his Pershing Capital coffers.
Never too old to have a happy childhood!
schlimm Why would either BNSF or UP want to get into a bidding war for a somewhat distressed railroad like NS (or CSX) now?
Thanks to Chris / CopCarSS for my avatar.
schlimm Well, that could be. But he seemed to place a lot of the efficiencies to be gained after merger by bypassing the Chicago bottlenecks.
NS is not willing to talk. Will Hunter Harrison mount a hostile take over attack?
Let slip the dogs of war. It may prove quite a show.
https://www.youtube.com/watch?v=yyeKYQdYISg
Murphy SidingHarrison thinks there are efficiencies to be gained after merger by bypassing the Chicago bottlenecks...ok If the two merged, Canadian Southern would gain these efficiencies and that would improve the bottom line. If the efficiencies that could be gained are from the CN part of the operation, then CN could gain those without NS's asistance. If CN could gain those efficiencies on their own, there's no reason to merge with NS. The merger must be based on some other logic.
CP (not CN) can only gain the efficiencies of bypassing Chicago (and others which he did not specify) by acquiring NS.
dakotafred I wonder where MILW gets his info that Hunter Harrison is "on his last legs age-wise and won't be in the job of CEO much longer."
I wonder where MILW gets his info that Hunter Harrison is "on his last legs age-wise and won't be in the job of CEO much longer."
Harrison had surgery earlier this year. There was a rumor on another site that a past round of cancer had reoccurred. Nothing more ever said about it, although EHH himself said his doctor told him to change his lifestyle. (Normal for doctors.)
I'm of the opinion that this is all to bump up the stock price so the big investors can dump shares. I wouldn't think there is that much CP-NS interchange that a merger would improve service. I wonder if all the discussions, more so than when EHH talked about acquiring CSX, isn't because NS has more PR/railfan friendly projects.
On another site there was mention of a rumor on investor blogs that maybe CP is actually getting ready to put itself up for sale. The ultimate dump I suppose. Unfortunately there were no links to said blogs, so just rumor FWIW.
Back to the sidelines, Jeff
schlimm Murphy Siding Harrison thinks there are efficiencies to be gained after merger by bypassing the Chicago bottlenecks...ok If the two merged, Canadian Southern would gain these efficiencies and that would improve the bottom line. If the efficiencies that could be gained are from the CN part of the operation, then CN could gain those without NS's asistance. If CN could gain those efficiencies on their own, there's no reason to merge with NS. The merger must be based on some other logic. CP (not CN) can only gain the efficiencies of bypassing Chicago (and others which he did not specify) by acquiring NS.
Murphy Siding Harrison thinks there are efficiencies to be gained after merger by bypassing the Chicago bottlenecks...ok If the two merged, Canadian Southern would gain these efficiencies and that would improve the bottom line. If the efficiencies that could be gained are from the CN part of the operation, then CN could gain those without NS's asistance. If CN could gain those efficiencies on their own, there's no reason to merge with NS. The merger must be based on some other logic.
Murphy Siding schlimm Murphy Siding CP (not CN) can only gain the efficiencies of bypassing Chicago (and others which he did not specify) by acquiring NS. Oops! I meant CP. You know, those Canadian railroads all look alike to me. Why is taking over NS the only way? Wouldn't the trains run on the same tracks they do now, but just under different ownership?
schlimm Murphy Siding CP (not CN) can only gain the efficiencies of bypassing Chicago (and others which he did not specify) by acquiring NS.
Murphy Siding
Oops! I meant CP. You know, those Canadian railroads all look alike to me. Why is taking over NS the only way? Wouldn't the trains run on the same tracks they do now, but just under different ownership?
A combined ownership can utilize different classification and routing stragegies to operate the same tracks. How good or bad those stragegies would be would be the proof for the deal being good or bad.
Mark Meyer
In the man's defense, there is a lot about him that I'm aware of that I think most railroaders and railfans alike would appreciate. For instance, he's known for being a hands-on manager that is actually familiar with many of the routine tasks his employees must handle out in the field.
And while I'm unaware if he brought this policy forward to CPR, managers at Canadian National had to be qualified as engineers and/or conductors and work in the field on weekends a certain number of times a year in order to better familiarize themselves with the challenges at hand and thus become better managers in the end.
And I've largely only seen positive things from those that profess to be operating employees on the IC when it comes to scheduling most movements on the system and allow most of them to return to their home terminal each day. That was a Hunter innovation, if I'm not mistaken.
I think he puts short-term gains on the balance sheet ahead of medium/long-term goals, his efficency extremes negatively affected the ability of Canadian National and now CPR to be as customer focused as many of their competitors, and for whatever reason there's a culture of fear under his leadership that doesn't seem as prevalent on other Class 1's.
But it's also not all bad...
Victrola1 Canadian Pacific's chief executive said Thursday he remains optimistic about completing a merger with Norfolk Southern but executives at the Virginia-based railroad haven't been willing to discuss the idea at length..... Read more here: http://www.centredaily.com/news/business/article45509604.html#storylink=cpy Harrison said shareholders will be the ones who decide whether the deal moves forward, but he hopes he'll get a chance to sit down with Norfolk Southern executives. "It's hard to resolve issues if you don't talk," Harrison said. http://www.centredaily.com/news/business/article45509604.html If NS does not wish to talk with Harrison, then what? Read more here: http://www.centredaily.com/news/business/article45509604.html#storylink=cpy
schlimm[snipped - PDN] . . . He [EHH] will communicate with Squires by e-mail today, looking at "driving shareholder value" concerns. He will not put a public number on that, but says efficiencies are the most important benefit. . . . By merging end to end, they can create capacity by bypassing Chicago. He sees this as a great opportunity to improve NS's higher (than CP's) operating ratio. . . .
"Mr. Harrison: Show us the money - if you can . . . ?".
- Paul North.
VerMontanan[snipped - PDN] . . . He certainly molded CN into a powerhouse railroad, . . .
The great improvement in CN - including and especially the much lower Operating Ratio - all happened when Paul Tellier was CEO. I know, I owned stock in it then (and still do).
Harrison inherited it, improved it a little bit, and maintained it - but no, he did not do it, and most certainly not by himself. You could look it up (or borrow my copies of the annual reports).
BaltACD Murphy Siding schlimm Murphy Siding CP (not CN) can only gain the efficiencies of bypassing Chicago (and others which he did not specify) by acquiring NS. Oops! I meant CP. You know, those Canadian railroads all look alike to me. Why is taking over NS the only way? Wouldn't the trains run on the same tracks they do now, but just under different ownership? A combined ownership can utilize different classification and routing stragegies to operate the same tracks. How good or bad those stragegies would be would be the proof for the deal being good or bad.
My, it was instructive to watch Harrison on Bloomberg today. He hardly looked or sounded enfeebled by age, as one or two on here have suggested (thinking wishfully?) that he is. Equally specious -- or at least undemonstrated -- is the claim that this merger is driven by his "ego" rather than his view of industry necessities.
What I love about Harrison, besides his documented accomplishments, is that he is the first railroad executive in 50-60 years who reflects in his persona, and the media attention he receives, the rails' rightful importance and place in our economic life.
Nobody since possibly Al Perlman, who was hobbled by regulation from getting as far as Harrison has, has made the media and so the public sit up and pay attention like EHH.
I hope to heaven he's still on the scene in 2018 and beyond.
dakotafredMy, it was instructive to watch Harrison on Bloomberg today. He hardly looked or sounded enfeebled by age, as one or two on here have suggested (thinking wishfully?) that he is. Equally specious -- or at least undemonstrated -- is the claim that this merger is driven by his "ego" rather than his view of industry necessities.
I had the same thought. It is apparent many on here did not actually watch EHH on Bloomberg.
Hunter is still yapping about this because he wants shareholders to pressure NS mgt. Its more interesting that he's spending so much time talking about this than what he actually says.
I'd guess the next step would be to up the ante to keep the pressure on. I suppose there is a point at which BNSF or UP would jump in. I'd guess they are just waiting to see if NS can sucessfully stiff arm CP before they have anything to say.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
IHB has been discussed in this thread as one artery to connect the CP and NS lines in Chicago and thereby theoretically reduce congestion (although trains would be travelling through the same railroad "intersections" that they do now).
Another potential actual bypass of Chicago for southeast-bound grain and East Coast-bound ethanol trains from Iowa and southern Minnesota could be over the IAIS from the Quad Cities to either Peoria or Streator. CP shows the IAIS as a "Principal Shortline Connection" on their system map, and in the NS Annual Report, the map therein shows IAIS as a trackage/haulage portion of the NS network all the way to Des Moines (which is different from the NS web site map).
BNSF was reported in News Wire several months ago as transferring some East Coast oil trains to CSX at Smithboro, IL, which is on the Big Four east of St. Louis, so something similar is already being done.
It would be another possible "mighty fine" gateway - it just may increase train frequency on The Rock Island line.
wanswheel Excerpt from The Globe and Mail, Nov. 9 http://www.theglobeandmail.com/report-on-business/canadian-pacific-said-to-explore-norfolk-southern-takeover/article27176306/ Benoit Poirier, an equities analyst with Desjardins Capital Markets, noted................................ Mr. Harrison has made strides to improve CP’s efficiency and profitability. Building a better rail network and applying his operational model to the underperforming Norfolk Southern....................
Excerpt from The Globe and Mail, Nov. 9
http://www.theglobeandmail.com/report-on-business/canadian-pacific-said-to-explore-norfolk-southern-takeover/article27176306/
Benoit Poirier, an equities analyst with Desjardins Capital Markets, noted................................ Mr. Harrison has made strides to improve CP’s efficiency and profitability. Building a better rail network and applying his operational model to the underperforming Norfolk Southern....................
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