"C'mon now, How much for Canadian Pacific"???????

[samfp1943]

Apparently, the 'other shoe 'is about to fall...

   An item in today's TRAINS NewsWire:

      http://www.trains.com/trn/default.aspx?c=a&id=2201

                                   Let the merger battles commence...Again.

[nanaimo73]

http://www.reportonbusiness.com/servlet/story/RTGAM.20070718.wrcp18/BNStory/robNews/home

[samfp1943]

TORONTO - In a move that could have widespread implications for North American railroading, the Toronto Globe and Mail reported private equity firm Brookfield Asset Management is trying to buy Canadian Pacific Ltd. Shares of CPR stopped trading on the Toronto Stock exchange in response to the news. If the Brookfield bid were successful, it would represent one of the largest leveraged buyouts ever seen in Canada.

http://www.reportonbusiness.com/servlet/story/RTGAM.20070718.wrcp18/BNStory/robNews/home

Hello, Dale:

     The Trains Newswire article was pretty thorough, and somewhat lengthy; since Bergie cracked on me for posting another Newswire item, I am posting only links, and being necessarily vague on details

    A possibility mentioned was a merger/takeover/buyout, or whatever, by Union Pacific in a strategic partnership with Canadian Pacific.    Can you visualize the CP Steamers cared for by UP's Heritage group?.... Talk about fantasys---Way too cool!!

[nanaimo73]

Hi Sam,

I like the Globe and Mail article a bit better.

As for CP steam on Union Pacific, south of the border, UP hasn't been that receptive to SP steam on their lines.

[samfp1943]

Hi Sam,

I like the Globe and Mail article a bit better.

As for CP steam on Union Pacific, south of the border, UP hasn't been that receptive to SP steam on their lines.

Dale:

   Gotta agree with you, THe Globe and Mail article is pretty thorough, seem to carry more factual details and with out the allusions. Can't speak to the issues of the UP north of the border, around here there seems to be, my impression, that we are seeing more than the usual numbers of CPRR run through units, and have seen several trains lately with CP uints on the point. Should be interesting to watch how it plays out.

    As for the political aspects, our news media does us all a disservice; living here one gets the impression we are on our own planet,alone without anyone, but Americans.  An almost xenophobic denial of other countrys' news and events, on most American media outlets.. Canadian politics is a mystery to this part of the world. As for myself, I have enjoyed my trips to Canada, the folks there are great, with the exception of the people in Quebec, too much of a snot-banger attitude for me in Quebec..I guess I'm venting, and getting off topic.

   I'll stop before I get in trouble 

[Murphy Siding]

     It seemd like both articles make it sound like this would immediately send CP into the arms of UP?  Why would UP want to get involved?  I read it, that CP is worth about $12 Billion, but a bidding war would run the price up to $15 Billion.  So, after UP pays the inflated price, what would they have to show for it?

[Railfan1]

Let the final slugfest of mergers begin.......

[Anonymous]

Ya'll are overlooking the most ominous, earth-shattering aspect of this story....

"Australia's Macquarie Bank Ltd., a heavyweight in the world of infrastructure investments, has modeled a possible CPR transaction and is said to be interested in the company, according to investment bankers, although it has not formally made an approach. Sources said Brookfield was working on a plan that would split the 120-year-old railway into two separate entities: an operating company that actually runs the trains and a real estate company that holds the tracks and rail yards." (bold underlined italics mine)

 

All I gots to say is.....

Open Acess - learn it, love it, live it!

 

[Murphy Siding]

    Dave- I wondered how long it would take you to point that out.  Now I ask you, why would UP want to buy the cow, when it appears that an Australian company may be willing to rent them one?

[jeffhergert]

From what I read on the Trains newswire (I'm having trouble getting the other report to open) I don't think they are thinking open access.  It sounds more like financial maneuverings.  The real estate company will lease the operating company the track.

I have a feeling that they want the land the railroad sits on, but probably don't want to run the railroad.  If they divide the company into two seperate entities, down the road they could sell off the operating company, lease the new owners the track, while holding onto the land the tracks sit on.  

I would think whoever owns the operating company, their lease of the trackage would be exclusive. 

Jeff 

 

[lenzfamily]

Hi All

Some observations about a rumoured buyout of CP.

We're living in an overheated world of mergers and aquisitions at the moment. It's one of the main reasons the equity markets in North America and elsewhere are as attractive they currently are. While I'm no expert in the field I would say that Brookfield is doing what any equity investor would do, which is to seek to acquire as many solid equities as it can to bolster its portfolio. The problem of course is whether it can increase the value of (and also successfully manage) its potential aquisitions. The devil as usual is in the details. Brookfield was trying to negotiate a non-competitive buyout and I'm not at all surprised they were rebuffed by the CP BofD under the circumstances. Who would realistically do so? Especially now.

Also, Caisse de Depot is like the OTFPB, a major Canadian pension plan investor with a huge portfolio and a stellar investment track record. Brookfield (formerly Brascan) is trying, I expect, to grow into the market with some significant investments (and partnerships I might add) of which CP would be a significant part. Whether or not they succeed remains to be seen.

Somehow I doubt it.

I also agree with the poster who said that the USA regulatory regime does not appear  to support such moves. I also wonder whether UP could realistically manage such an acquisition at this time. CP has its own unique set of operating concerns in the Canadian West (the Mountain Division particularly) and I wonder if the UP has the corporate ability to adapt to these concerns.

CP, as Dave has pointed out in his reference to the Globe article, is a solid company. Although it may not have the reach of CN in its primary network it is still a solid Canadian based company and has been so for many years. It may not have CN's operating ratio but it is far from being an unprofitable company for its shareholders. For that reason as much as any other it is attractive for a takeover. It has considerable value and its Board of Directors knows it well, I'm sure.

The dance will contune for some time yet, I'm sure.

 

Charlie

[Los Angeles Rams Guy]

No matter how this one turns out (and I'm VERRRY interested how this one's gonna turn out as I'm a CP employee) I've said for YEARS that CP made a drastic mistake when they sold the "Kansas City Corn Lines" (now the ICE).  They NEED that Kansas City gateway to possibly hook up with the KCS should BNSF take the NS and the UP take the CSXT to avoid getting shut out of the merger game.  But if this group keeps its efforts up it could start a possible bidding war for CPRS that COULD get the UP or someone else involved.     

 

[tatans]

So my bid of $17,000 (CDN) for the old sleepy "R" may be a little low, I figure that's what it's worth when they paid me 70 cents/hour for working on the ice gang a hundred years ago.