Mon, Nov. 9, 2:10 PM
- Shares of Norfolk Southern (NSC +12.2%) and Canadian Pacific (CP +6%) spike on reports the companies are considering a merger.
- The speculation is giving a lift to a good portion of the sector with CSX (CSX +3.7%), Union Pacific (UNP +2.2%), and Kansas City Southern (KSU +2.9%) all notable movers.
- Railroad M&A talk has picked up this year as some market caps have moved down.
Thu, Jun. 11, 5:49 PM
- CSX jumped 3% today amid continued railroad merger speculation as well as a 9.4% increase in the company’s intermodal cargo reported in yesterday’s weekly traffic update from the Association of American Railroads.
- "The bigger weight is around the speculation of the merger," Cowen's Matt Elkott told Bloomberg; once Canadian Pacific CEO Hunter Harrison mentioned a merger attempt last October, "it wasn't going to go away," the analyst said.
Nov. 7, 2014, 8:46 AM
- Norfolk Southern (NYSE:NSC) +3.5% premarket after Bill Ackman said Canadian Pacific Railway (NYSE:CP) might be interested in a rival to one-time target CSX.
- While Ackman did not name NSC in his comments yesterday, he appeared to have the company in mind by describing his takeover candidate in relation to CSX, as the two carriers go head-to-head in the U.S. east of the Mississippi River.
- “I think something happens,” Ackman said, noting that CP CEO Hunter Harrison believes "pro-competitive" railroad mergers will be permitted by regulators.
Oct. 22, 2014, 5:57 PM
- Railroad stocks were hammered today after some executives threw cold water on the idea that the railroad industry is ripe for consolidation.
- Norfolk Southern (NYSE:NSC) CEO said during today's earnings conference call that he thinks a major merger would be “highly problematic,” since in the past they have led to "significant service problems for some period of time" and potential cost savings such as overlapping routes do not exist as much anymore.
- Yesterday, Canadian Pacific (NYSE:CP) CEO Hunter Harrison confirmed that talks with CSX fell apart after several meetings because they couldn't agree on key issues, and added that a deal with Kansas City Southern (NYSE:KSU) is unlikely because the stock is expensive.
- In today's trade: NSC -3%, CP -1.6%, CSX -0.6%, KSU -2.7%, UNP -1.8%, GWR -2.6%, CNI -0.9%, BRK.B -0.9%.
Oct. 20, 2014, 7:18 AM
Oct. 14, 2014, 3:23 AM
- Discussions between Canadian Pacific Railway (NYSE:CP) and CSX (NYSE:CSX) about a merger are still possible despite the latter rebuffing an approach from CP, the WSJ reports.
- CP CEO Hunter Harrison believes that a tie-up would help make rail infrastructure more efficient, such as with the handover of goods from one operator to another.
- However, analysts, rivals and shippers fear that any merger would exacerbate congestion delays and increase costs.
- "I think it’s a common belief that now would not be a good time," says a top executive at a major railway company, "because of the regulatory change that would accompany it and the upheaval it would cause the industry."
Oct. 13, 2014, 6:33 PM
- Canadian Pacific Railway (NYSE:CP) reportedly approached CSX about a merger, but several analysts say such a deal has virtually no hope of getting a green light from regulators.
- U.S. Surface Transportation Board rules on Class 1 railway mergers have "an arguably impossible hurdle rate," Credit Suisse analyst Allison Landry says, which makes the deal a "non-starter.”
- At the least, the agency would want CP and CSX to allow other operators to run over their network, and likely want assurances that the merger would alleviate traffic problems that have snarled railroads, particularly around Chicago.
- CP may have an ace up its sleeve: One of its directors chaired the STB and its predecessor agency during 1995-2002, and would bring important knowledge of the regulatory requirements to any possible deal.
- Despite the unlikelihood of a deal, CSX jumped 5.9% during today's trade; CP shares slipped 2.3%.
Oct. 13, 2014, 10:08 AM
- There's some bets being placed on M&A activity within the railroad sector after a weekend report of interest by Canadian Pacific in CSX (CSX +12.6%) stirs the pot.
- Gainers: Norfolk Southern (NYSE:NSC) +5.1%, Kansas City Southern (NYSE:KSU) +4.2%, Canadian Pacific (NYSE:CP) +3.2%, Union Pacific (NYSE:UNP) +1.0%, Canadian National Railway (NYSE:CNI) +1.3%.
Oct. 12, 2014, 4:11 PM
- Canadian Pacific Railway (NYSE:CP) reportedly approached CSX Corp. (NYSE:CSX) during the past week about a potential merger that would unite two of North America's largest railroad operators.
- The approach was rebuffed; it is unclear whether CP has since shelved the effort.
- A deal would create an industry giant with a combined market cap of $62B.
- Any deal would be subject to review by the U.S. Surface Transportation Board, which has a history of intervening.
- Source: WSJ
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