NORFOLK, Va. — Norfolk Southern has rejected Canadian Pacific’s $28 billion proposal to combine the two railroads.
Last month, Canadian Pacific offered $46.72 cash and 0.348 shares in the combined company.
Norfolk Southern Corp, the largest railroad operating in Chattanooga,. said today that its board determined the proposal was “grossly inadequate, creates substantial regulatory risks and uncertainties that are highly unlikely to be overcome and is not in the best interest of the company and its shareholders.”
In a statement today, Norfok Chief Executive James A. Squires said there was a “high probability” that the deal would be rejected by the Surface Transportation Board.
“Even if the proposed combination were ultimately to be cleared, it would be subject to a wide range of onerous conditions that would reduce the value of the stock consideration that has been proposed,” Squires said.
Canadian Pacific unveiled its offer in November in an attempt to create a North American rail network that stretches from Canada’s West Coast to the Gulf of Mexico and Atlantic Ocean.