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
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.
C&NW, CA&E, MILW, CGW and IC fan
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
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.
Well, that could be. But he seemed to place a lot of the efficiencies to be gained after merger by bypassing the Chicago bottlenecks.
Thanks to Chris / CopCarSS for my avatar.
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.
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.
schlimm Why would either BNSF or UP want to get into a bidding war for a somewhat distressed railroad like NS (or CSX) now?
Why would either BNSF or UP want to get into a bidding war for a somewhat distressed railroad like NS (or CSX) now?
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!
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
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..
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..
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.
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
If NS does not wish to talk with Harrison, then what?
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"
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
dakotafred The part I don't understand is CP eagerness to give away the store with reciprocal switching. 1. Why should this even be necessary in what is billed as an end-to-end deal? 2. If the shippers and gummint are going to insist, shouldn't the concession be withheld, as a bargaining chip, until a lot later on in the process?
The part I don't understand is CP eagerness to give away the store with reciprocal switching.
1. Why should this even be necessary in what is billed as an end-to-end deal?
2. If the shippers and gummint are going to insist, shouldn't the concession be withheld, as a bargaining chip, until a lot later on in the process?
We may learn more tomorrow as EHH is an interviewee on Bloomberg GO sometime between 7-9 CST.
Had an investment person say that he found it ironic that NS buys a CP line with money that CP will use to buy some of NS.
Beats Canadian Pacific and CSX. I didn't like the thoughts of that one, since I don't see them needing two US gateways to Montreal. At least if this happens, the CN/CSX traffic is likely to stay on the St. Lawrence Subdivision while the status quo largely would stay the same on the D&H.
That said, I don't think it will happen. I see little strategic value in this or opportunities for cost-cutting. I think it's a weak attempt at inflating share prices and perhaps testing the waters for an unlikely further round of mergers that actually makes some sense.
And while the railfan in me shares the concern about the steam program and the heritage paintschemes, the fate of Altoona & Roanoke is even more important. CPR under Harrison isn't likely to see the sense in maintaining these two valuable assets when he can instead see short-term gains by eliminating at least one of them.
Unlike the heritage locomotives that have no noticeable effect on the bottom line, these resources seem like they're only a positive for NS's finances. Would be a shame to see a lot of jobs and a resource like that be eliminated for some weak short-term effects that will soon cost the combined company more than they ever saved.
Hopefully it doesn't happen. Beyond perhaps KCS, Class 1 mergers have gone about as far as they make any sense to go. Any further than this is only going to hurt competition and offer few opportunities to realize significant savings.
Efforts would be better spent joining forces to solve congestion in an area like Chicago, which could benefit every stakeholder. If any major aquisitions happen, I would instead expect it to be a large regional like MRL rejoining the Class 1 fold.
Hopefully the government does the right thing for a change if this ends up actually being serious.
EHH and Creel talk about synergies; if this merger occurs, based on their history at CN & CP, expect massive job cuts at NS. The operating ratio is mainly reduced by reducing employee costs.
Is there an 'under story' with Ackman's railroad forays - "moneyball" among the super rich?
http://www.usatoday.com/story/money/2015/11/18/bill-ackman-right-warren-buffett-and-coca-cola/75994220/
http://www.cpr.ca/en/investors/cp-discloses-full-details-of-offer-letter-to-norfolk-southern
CP puts out their offer in a press release. Is CP serious, or just more hype?
If the CP - NS merger falls through, will it still scare others to merger?
For some time I have hoped that CP and KCS would tie the knot. Forming a multi-national railroad (CP/KCS/KCSdeM) should give Hunter Harrison a nice legacy and provide CN with a formidable competitor.
"Paging Mr. Buffett. Mr. Warren Buffett. Paging Mr. Warren Buffett. Please see the concierge regarding a large black and white package that has been delivered to your attention."
cefinkjr ChessieCat123 Control of a major piece of national infrastucture by a foreign corperation that is essentional to our national defence does not sit well with many people. Better a private corporation with HQ in our friendly neighbor to the north than nationalization. Which is not in any way to suggest that nationalization (a la PC) is an option. I'm just saying that there are many things worse than having a Canadian corporation control a major US company.
ChessieCat123 Control of a major piece of national infrastucture by a foreign corperation that is essentional to our national defence does not sit well with many people.
Control of a major piece of national infrastucture by a foreign corperation that is essentional to our national defence does not sit well with many people.
Better a private corporation with HQ in our friendly neighbor to the north than nationalization. Which is not in any way to suggest that nationalization (a la PC) is an option. I'm just saying that there are many things worse than having a Canadian corporation control a major US company.
Well! Seems likw the " Cat" is officially out of the bag
Today's TRAINS Newsdwire carries the Headline " CP confirms merger offer "
FTA"...“We think eventually, it’s going to happen,” [Mr. Keith] Creel,[ COO] says. "...An end-to-end merger that would improve service and boost competition would be a recipe for success at the U.S. Surface Transportation Board, Creel says. But for a deal to make sense, Creel says shippers would have to be on board and CP would have to have a friendly merger partner so the railroads would speak with a common voice. The railroad used similar language in its news release. CP is taking the lead in promoting consolidation because it’s the right thing to do, Creel says, and because the railway’s service model and lower costs help shippers win in their end markets. “That’s compelling,” he says. Creel says that the merger process will not be easy but that regulatory hurdles can be overcome..."
Will be an intersting circumstance to follow.... Wonder How Long it may take?
ChuckAllen, TX
BaltACD Victrola1 US carriers demonstrated that multiple roads could cooperate in operating long distance trains over multiple carriers (California Zephyr, UP 'City' streamliners etc.). The question becomes, why they did not cooperate in operating long distance trains transcontinentally over the Mississippi River - with nominally, Chicago, St. Louis, Memphis and New Orleans being terminal gateways between East and West.
Victrola1
US carriers demonstrated that multiple roads could cooperate in operating long distance trains over multiple carriers (California Zephyr, UP 'City' streamliners etc.).
The question becomes, why they did not cooperate in operating long distance trains transcontinentally over the Mississippi River - with nominally, Chicago, St. Louis, Memphis and New Orleans being terminal gateways between East and West.
Before the inauguration of the Canadian and the Super Continental, seldom were there more than two through sleepers between either Montreal or Toronto and Vancouver on either road.
Johnny
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