Mon, Apr. 11, 5:45 PM
- Canadian Pacific (NYSE:CP) CEO Hunter Harrison says its board will meet next week to consider using the cash once planned to acquire Norfolk Southern (NYSE:NSC) for a possible buyback, dividend or both.
- The CEO tells Reuters that CP Rail's failed bid for NSC, which he attributed to multiple factors including critical statements by the U.S. Justice Department and the U.S. Army, did not spell the end of mergers in the rail industry.
- Some analysts have speculated that Kansas City Southern (NYSE:KSU) could be a deal candidate, and the regulatory barriers might be lower than in the CP-NSC scenario, but Harrison says KSU, which he calls expensive, is "not a good fit."
- In today's trade: CP +3.4%, NSC -2.6%, KSU +0.1%.
- Now read Is Canadian Pacific smoking that 'Don Quixote'?
Dec. 11, 2015, 4:45 PM
- Select railroad stocks were an island in the storm today after Bloomberg reported that Berkshire Hathaway's BNSF Railway (BRK.A, BRK.B) is considering making a competing bid for Norfolk Southern (NYSE:NSC).
- While BNSF Executive Chairman Matt Rose does not favor more North American rail mergers, he tells Bloomberg the company would not sit on the sidelines in any fresh dealmaking: “If there is consolidation to be had, we would participate as well.”
- Rose’s remarks raise the prospect of another suitor for NSC, which already has turned down Canadian Pacific (NYSE:CP); CSX, NSC’s larger rival in the eastern U.S., would be “very much in play” if CP succeeded with its effort, Rose says, noting that “we’ve never in this industry just done one merger" at a time.
- In today's trade: NSC +2%, CP -2%, CSX +4.1%, UNP -0.2%, KSU -0.1%, CNI -2.1%.
Dec. 4, 2015, 2:57 PM
- Railroad stocks are broadly lower following Norfolk Southern's (NSC -1.2%) sharp rebuke of Canadian Pacific Railway's (CP -4.5%) takeover bid "at any price" and a BofA Merrill Lynch negative research note on the sector.
- CEO James Squires tells Bloomberg that NSC execs “haven’t talked to a single customer that supports the idea" of merging with CP, and that “our customers’ responses range from highly skeptical to vehemently opposed."
- Citing volume declines and weak trends that look to continue into 2016, BofA downgrades CSX (CSX -1.3%) and Union Pacific (UNP -1.2%) to Neutral from Buy, as the firm remains negative on rails with significant coal exposure, and cuts Kansas City Southern (KSU -1.5%) and Genesee & Wyoming (GWR -5.3%) to Underperform from Neutral; the firm lowers KSU due to its growth premium in an environment of slowing growth and cut GWR due to its commodity exposure.
- BofA reiterates its Buy rating on Canadian National (CNI -1.2%), citing CNI's significantly lower coal exposure, robust intermodal share gains and attractive risk/reward returns.
Nov. 9, 2015, 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.
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. 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%.
May 14, 2013, 10:19 AM
Kansas City Southern is a holding company with domestic and international rail operations in North America that are strategically focused on the growing north/south freight corridor connecting key commercial and industrial markets in the central United States with major industrial cities in... More
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