Victrola1 CP receives overwhelming support from shippers for proposed CP-NS combination See all newsFebruary 25, 2016 Calgary, AB Canadian Pacific (TSX:CP) (NYSE:CP) has received over 80 letters of support from a broad cross section of customers for CP's proposal to acquire Norfolk Southern Corp. (NS); 62 of these letters have been posted to the Surface Transportation Board (STB) website. That brings the number of letters from shippers in support of the proposed CP-NS combination to more than three for every one shipper letter in opposition. http://www.cpr.ca/en/investors/cp-receives-overwhelming-support-from-shippers-for-proposed-cp-ns-combination Today's news from the front in the ongoing War of the White Papers.
Canadian Pacific (TSX:CP) (NYSE:CP) has received over 80 letters of support from a broad cross section of customers for CP's proposal to acquire Norfolk Southern Corp. (NS); 62 of these letters have been posted to the Surface Transportation Board (STB) website. That brings the number of letters from shippers in support of the proposed CP-NS combination to more than three for every one shipper letter in opposition.
http://www.cpr.ca/en/investors/cp-receives-overwhelming-support-from-shippers-for-proposed-cp-ns-combination
Today's news from the front in the ongoing War of the White Papers.
The first batch were just signed form letters written for them by CP. This new batch any different?
I'll be impressed when UPS, Ford or GM sign one. Oh, wait a minute, they already chimed in "against"!
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
I'll only be impressed when they come back with letters of support from NS shippers and not their own.
The young lady has it right.. why bundle up when its obviously so warm out?
Victrola1 Blame Canada! Laughable. "Shelia: Well? Blame Canada, blame Canada, it seems that everythings gone wrong since Canada came along, blameCanada, blame Canada Copy shop attendent:They're not even a real countryanyway" https://www.youtube.com/watch?v=DBpgcZ1zYJs
Blame Canada! Laughable.
"Shelia: Well? Blame Canada, blame Canada, it seems that everythings gone wrong since Canada came along, blameCanada, blame Canada Copy shop attendent:They're not even a real countryanyway"
https://www.youtube.com/watch?v=DBpgcZ1zYJs
Never too old to have a happy childhood!
I don't think so. Ackman is still very rich and he no doubt understands market volatility. Market declines happen.. to the seasoned investor they're simply welcome buying opportunities.
The following is taken from a daily news blog published by Fortune magazine:
"Billionaire investor William Ackman has managed to erase his entire 40% return of 2014, a performance that put him at the pinnacle of the hedge fund world. His Pershing Square Holdings portfolio has lost 17.3% so far in 2016, the fund told investors on Wednesday. When you combine that with the 20.5% drop in 2015 in a relatively flat year for markets, the fund's declines are now greater than its 2014 gain. Valeant Pharmaceuticals, which has been part of Ackman's portfolio for only a year, has been the fund's main loser."
A lot of professional and individual investors are underwater for 2016 to date, but Mr. Ackman also suffered major losses in 2015. Perhaps the situation with the NS offer resembles that of the last play by a football team facing a loss -- throw a jump ball into the end zone and hope it works out.
Ungainly is the perfect word to describe it. But money and politics are pretty much in lockstep. People vote with their minds and their wallets... which is why we have international trade. The people who poo poo trade with China and Mexico are generally easy to find in any Walmart aisle, shopping for the cheapest foreign made product they can find. I agree that an NS and CP merger would be ungainly to say the least.. it really makes no sense to have a diagonal transcontinental that cuts across regions of the continent that currently don't have much trade. But the argument made against a Canadian company owning an American one is moot.. that ship has sailed long ago. We live in an interconnected world where trade and ownership lines trump other considerations..at the root of it the will of the people expressed through supply and demand made that happen.
Miningman, I agree with you wholeheartedly about the continuing relevance of borders. We citizens -- and our representatives, the pols -- can continue to mind them even if the money boys don't want to.
Also about CP taking over NS. It's ungainly, a "transcontinental" for the eastern United States and for western Canada. Also, to be blunt, who needs the lion's share of the profits going to Calgary instead of Norfolk?
Good consequence to point out Dakatofred, however if in fact UP/CP/KCS came into existence it would have to be countered with BNSF/CN and certain trackage rights to insure competition with Mexican interchange. UP/CP/KCS just feels right in terms of thinking for the future and nation building. CP/NS is just insulting and short sighted, certainly has potential for a mess but what do I know. Also I still believe the border means something, especially with changing political forces but I suppose $'s and investments do not worry too much about borders and can be moved around the world with a stoke of the keyboard.
BaltACD http://www.progressiverailroading.com/canadian_pacific/news/Report-Shuster-leaning-toward-no-on-CP-NS-merger--47365
http://www.progressiverailroading.com/canadian_pacific/news/Report-Shuster-leaning-toward-no-on-CP-NS-merger--47365
Not surprising. His dad (Bud) was in the exact same spot during the NS/ Conrail takeover. A takeover that resulted in the closure of the Holidaysburg car shops and the loss of many decent jobs in his home district.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.
kgbw49 and each of the Canadian roads receiving a smaller piece of the pie to give each of them a route to the Northeast from Chicago and Buffalo
CN already has their route, and thinking about it, CSX might accept a reasonable offer on their trackage fron Chicago to Grand Rapids and on to Detroit. CSX traffic on those two lines has been minimal for several years. They've already leased or sold the Saginaw sub north of Flint, and from Flint south to Plymouth traffic is again light.
Norm
Mr. Wizlish's notes on ownership of Canadian railroads is correct, and actually forms the unpinnings for the opinion that if - "if" - an endgame in the East occurs, the end result will be UP and BNSF owning the lion's share of the Eastern systems and each of the Canadian roads receiving a smaller piece of the pie to give each of them a route to the Northeast from Chicago and Buffalo, a route from Chicago and Detroit to Atlanta and the Southeast, and in CP's case, access to at least Mobile on the Gulf Coast.
For example, it is not too hard to foresee in an intermodal-centric future of railroading that a railroad like BNSF could do very well hauling intermodal consumer goods out of Mexico and the West Coast to the 2/3 of the population that lives east of the Mississippi River.
In that regard, the former Southern from New Orleans through Birmingham to Atlanta and Charlotte would end up being a valuable intermodal route that would make a nice approximately 1150 mile haul from Laredo to Atlanta and about 1400 miles to Charlotte, with West Coast stacks coming on line at Birmingham from the old Frisco as they do now. Routes from St. Louis to the Ohio Valley cities of Louisville and Cincinnati on the former Southern would also be natural extensions of the former Frisco for intermodal. Finally, the whole northern tier from Chicago to NY/NJ and the Northeast, with branches serving Detroit, Indianapolis, and Columbus would be a natural extension of the former ATSF. While some of this is already happening with a revenue split of two carriers, it is not unreasonable to surmise that with sole ownership, BNSF would end up supercharging all of those routes.
Meanwhile, CP could reach Atlanta and Mobile down the former CNO&TP, and the Northeast on the former NKP and Lackawanna. Both of those would also be natural extensions of the current flow of CP traffic.
Of course, there are dozens of variations that can be conceived.
Most likely, however, it looks like the status quo for now unless CP somehow prevails with NS stockholders, in which case almost anything is possible given the comments from other railroads on becoming active participants if that happens.
Miningman A Union Pacific/Canadian Pacific/Kansas City Southern system under one banner would be a formidable railroad.
A Union Pacific/Canadian Pacific/Kansas City Southern system under one banner would be a formidable railroad.
Paul,
Got the same flier, had pretty much the same thought. Like some intern sent it as an afterthought. Kind of an 'oh S---' moment
Bob
The NYC had 73% ownership of the TH&B, granted this was through subsidiary's Michigan Central and the Canada Southern. Their direct ownership was around 37%. The Pere Marquette had its own tracks from the border all the way into St. Thomas. Most American roads operated in Canada under chartered subsidiary's and if not then trackage rights. NS operates today on trackage rights across Southern Ontario Detroit-Buffalo on CN thanks to the former Wabash.
However, I believe you are correct on an outright purchase of CP, limiting ownership to minority status and no more than 49%.
A Union Pacific/Canadian Pacific/Kansas City Southern system under one banner would be a formidable railroad. In addition to UP's historic overland routes this would add the growing future importance of North-South and encompass 3 countries. It would be a radical departure for UP yet seems to fit their style of service and nation building.
MiningmanHow about the Union Pacific buying up majority interest in Canadian Pacific? This actually is a nice fit, in some areas at least. That would open the door for BNSF to acquire CN or merge the two. KCS has to go somewhere.
KCS has the Mexican connection, which neither of the others imho is set up to optimize either operationally or strategically. I would expect them (together with Ferromex, etc.) remaining reasonably independent as the cost of acquisition might kill any prospective bottom-line profitability even if EHH were to implement some of his OR-increasing techniques.
I have the impression -- I might be wrong -- that Ackman is using EHH more as a figurehead than an actual strategic force for ongoing optimization of a combined CP-NS. Based on the past few decades of financier 'involvement' in railroading, I have to wonder whether the present CP has much of a clue about running NS more effectively once Hunter becomes an 'emeritus' eminence grise. (And his 'boogeyman' factor decreases...)
My understanding is that Canadian law prohibits a foreign (of course including any United States) company acquiring, and probably exercising ownership control of, a Canadian railroad company. That's why a Canadian entity can own things like Grand Trunk or Illinois Central, or pretend to merge ATSF and SP while stripping out the key assets, but Buffett or anyone else in the United States can't reciprocate.
Don't know what protections might be in place for hedge-fund ownership of capital allowing 'back-door' influence on a Canadian corporate board and thereby exerting de facto control, but as far as actual merger would go it's probably a one-way street.
I received the same mailer as Mr. North, except mine was online. Lots of white space, some photos, some vague promises of improvement but not the kind of detail that would make one think there was a thought out plan somewhere behind it.
Perhaps Mr Harrison's greatest gift is that his appearance causes near paralysis in the management of his targets.
A week or so ago I received a 'mailer' or 'flyer' (best words for it) from NS to shareholders like me. Touted how much they'd done to improve things, what their plans were for the future, etc. to deal with the obvious issues (loss of coal traffic, etc.).
Not very impressive - lack of hard numbers and specifics. One step above a magazine ad - about 3 steps below an annual report. Most PowerPoints at industry presentations are far better. It would have been better to not send it at all - makes me wonder about the quality of the management and its strategic thinking, if that's the best they can do. Then again, maybe it was just to reach out to, contact, and reassure small, non-institutional investors, who don't have the inside or frequent info that the big ones do.
- Paul North.
Ya, I suppose you are correct. I was thinking more along the lines of blocking the Michigan Central Bridge in Fort Erie with those giant steel walls across the tracks or discontinuing passenger service VIA/Amtrak Toronto-Chicago thru the St. Clair Tunnel. CN taking over IC certainly trumps those events, as you well pointed out.
How about the Union Pacific buying up majority interest in Canadian Pacific? This actually is a nice fit, in some areas at least. That would open the door for BNSF to acquire CN or merge the two. KCS has to go somewhere. Then you have 2 in the East and 2 in the West setting up either the grand finale or leave it at that.
My take- nothing happens and all stays the same for a good long while yet.
Because of the condition to "enhance competition" under the new merger rules, plus nationalistic pride (not an insult) in both Canada and the US, the "end game" will result in two in Canada, two in the western US, and all four having a piece of the pie in the eastern US. CP and CN will all have routes to the Gulf (CN already has one), to Atlanta and Charlotte, and into Ohio, Pennsylvania and NJ/NY from Chicago and Buffalo, most likely primarily on secondary CSX and NS routes, while BNSF and UP will end up with ownership of the main east-west routes and the main "operational triangle routes" (Chicago-Jacksonville-NY/NJ-Chicago) of CSX and NS integrated into their route structures. Just one opinion formed from looking at a very cloudy and cracked crystal ball.
MiningmanAfter 911 many things changed for the railroads at the borders. Point is I believe the border trumps a large multinational physically connected railroad system.
Whew! I was worried for a moment there that a Canadian system might acquire one or more significant carriers in the United States, say a strategic north-south system serving modern container ports, for competitive advantages. Wait ... what?
I can't blame Canadians for thinking that the same mojo that Tellier and EHH could summon up can't be repeated for Ackman & Co. and EHH. They can even trot out the financial advantage of over-the-border management as the pace of inversions under Obama (and prospectively under the tax policy of a Clinton or Sanders administration!) continues to accelerate.
So while we wait as these 2 giants duke it out It gives us a chance to wonder if 2 systems North America wide is inevitable as the end game. I don't know..Americans have long been railroading in Canada and Canadians in America, but surely the border means something. Policies and politics shift over time.
After 911 many things changed for the railroads at the borders. Point is I believe the border trumps a large multinational physically connected railroad system.
Until we invent "beaming" a-la Star Trek to move freight I think it ends with 2 in the West, 2 in the East, 2 in Canada running down the center of America in a North/South spine. Chicago congestion will be solved with multiple gateways. We almost sort of have that now, except for the Chicago problem.
Canadian Pacific (TSX:CP) (NYSE:CP) today announced it will seek a declaratory order from the U.S. Surface Transportation Board (STB) confirming the viability of the voting trust structure that CP has suggested as part of its proposed merger with Norfolk Southern Corp. (NS). CP urges NS, consistent with its duties to its shareholders, to assist constructively in this effort, but intends to proceed regardless of NS's cooperation.
http://www.cpr.ca/en/canadian-pacific-to-seek-declaratory-order-from-u-s-surface-transportation-board
Predicting the future is pretty easy 50+ years after it has already occurred.
C&NW, CA&E, MILW, CGW and IC fan
Great post Paul North! As Mark Twain stated "Truth is stranger than fiction". We shall see how this really all plays out. If we wrote something "way out there" it is likely .2% accurate at best and not even close to what will happen.
Miningman[snipped - PDN] . . . how about someone appearing, in say 1955, and announcing to various shareholders and executives that the Canadian Pacific Railway is seeking to purchase the Pennsylannia RR, the N&W, the Erie RR, the Lackawanna RR, the Southern and all its affiliates, the Wabash, the Nickel Plate, the D&H and numerous other smaller but important carriers all in one fell swoop, then I think you would have been put in a straight jacket and taken to the looney bin. . . . [snipped - PDN]
P.S. Yes !!! I FINALLY found it - from: http://kelvin12.livejournal.com/46098.html
"There is a nice story of a political prophet in Munich in 1928, who was asked to prophesy what would happen to the burghers of his city in five, fifteen, twenty, and forty years' time.
He began: 'I prophesy that in five years' time, in 1933, Munich will be part of a Germany that has just suffered 5 million unemployed and that is ruled by a dictator with a certifiable mental illness who will proceed to murder 6 million Jews.'
His audience said: 'Ah, then you must think that in fifteen years' time we will be in a sad plight.'
'No,' replied the prophet, 'I prophesy to you that in 1943 Munich will be part of a Greater Germany whose flag will fly from the Volga to Bordeaux, from northern Norway to the Sahara.'
'Ah, then you must think that in twenty years' time, we will be mighty indeed.'
'No, my guess is that in 1948 Munich will be part of a Germany that stretches only from the Elbe to the Rhine, and whose ruined cities will recently have seen production down to only 10% of the 1928 level.'
'So you think we face black ruin in forty years' time?'
'No, by 1968 I prophesy that real income per head in Munich will be four times greater than now, and that in the year after that 90% of German adults will sit looking at a box in a corner of their drawing rooms, which will show live pictures of a man walking on the moon.'
They locked him up as a madman, of course."
- General Sir John Hackett, "The Third World War"
Not all that much wackier than what the van Sweringens bankrolled by Morgan did -- or on only a nominally smaller scale, Robert R. Young.
(Granted, the PRR would always have been too arrogant to sell or be proxy-acquired... but we all know how quickly that played out.)
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