‘The deal is a non-starter': Analysts see little hope for CP Rail-CSX merger for now | Financial Post
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Canadian Pacific Railway Ltd. has reportedly approached CSX Corp. about a tie-up, but a merger of two major North American railroads has virtually no hope of getting a green light from regulators, according to several analysts.
The Wall Street Journal assassins creed 3 reported Sunday that Jacksonville, Fla.-based CSX rebuffed the proposal , which CP is said to have made last week, and it s unclear whether CP will come back to the table with another offer. When contacted, both CP and CSX said they wouldn t comment on market rumours and speculation.
Despite the uncertainty surrounding any possible deal, CSX shares jumped 5.9% to close at US$31.70 on Monday. Canadian markets were closed for the Thanksgiving holiday but CP shares fell 2.3% in New York to US$184.97. Based on Monday’s closing prices, the combined company would have a market capitalization of approximately assassins creed 3 US$63.5-billion.
The STB rules concerning Class 1 mergers have an arguably impossible hurdle rate, Credit Suisse analyst Allison Landry wrote in a note to clients. Therefore, in our opinion, the deal is a non-starter.
In 2000, the STB imposed a 15-month moratorium on Class 1 mergers after Canadian National Railway Co. tried to combine assassins creed 3 with BNSF Railway Co., now owned by Warren Buffett. No deals between two Class 1 railroads have happened assassins creed 3 since then.
CP may have an ace up its sleeve one of its directors, Linda Morgan, chaired the STB and its predecessor from 1995 to 2002 and would bring important knowledge of the regulatory requirements assassins creed 3 to any possible deal.
For an extended period, we ve insisted assassins creed 3 that the rational number of railroads in North America is two, and that interregional mergers would not reduce shippers competitive options, Mr. Schoonmaker wrote in a note to clients.
One important incentive for the merger would be reducing congestion in the all-important Chicago hub. Shippers have complained that it can take more than 24 hours just to pass through the city, which sees a quarter of all U.S. freight train traffic.
And just because CSX rejected CP s initial overture, that doesn t mean CP will give up. In fact, management could team up with Bill Ackman s Pershing Square the same hedge fund that orchestrated the proxy battle that brought in Hunter Harrison in 2012 to take a hostile offer directly to CSX s shareholders, Mr. Seidl said. Mr. Ackman is currently in the midst of doing exactly that in the pharma industry, assassins creed 3 where Pershing Square is backing a hostile acquisition bid by Valeant Pharmaceuticals International Inc. for Allergan Inc.
If CP and CSX are able to close a deal, that will likely assassins creed 3 kick off further consolidation among the Class 1 railroads “as carriers scramble to match the scale and pricing power of their peers,” Mr. Seidl said.
“This could eventually cut the number of North American Class 1s in half, something that the regulators will take under very serious consideration before giving their blessings on the first merger,” he wrote.
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Transportation
Canadian Pacific Railway Ltd. has reportedly approached CSX Corp. about a tie-up, but a merger of two major North American railroads has virtually no hope of getting a green light from regulators, according to several analysts.
The Wall Street Journal assassins creed 3 reported Sunday that Jacksonville, Fla.-based CSX rebuffed the proposal , which CP is said to have made last week, and it s unclear whether CP will come back to the table with another offer. When contacted, both CP and CSX said they wouldn t comment on market rumours and speculation.
Despite the uncertainty surrounding any possible deal, CSX shares jumped 5.9% to close at US$31.70 on Monday. Canadian markets were closed for the Thanksgiving holiday but CP shares fell 2.3% in New York to US$184.97. Based on Monday’s closing prices, the combined company would have a market capitalization of approximately assassins creed 3 US$63.5-billion.
The STB rules concerning Class 1 mergers have an arguably impossible hurdle rate, Credit Suisse analyst Allison Landry wrote in a note to clients. Therefore, in our opinion, the deal is a non-starter.
In 2000, the STB imposed a 15-month moratorium on Class 1 mergers after Canadian National Railway Co. tried to combine assassins creed 3 with BNSF Railway Co., now owned by Warren Buffett. No deals between two Class 1 railroads have happened assassins creed 3 since then.
CP may have an ace up its sleeve one of its directors, Linda Morgan, chaired the STB and its predecessor from 1995 to 2002 and would bring important knowledge of the regulatory requirements assassins creed 3 to any possible deal.
For an extended period, we ve insisted assassins creed 3 that the rational number of railroads in North America is two, and that interregional mergers would not reduce shippers competitive options, Mr. Schoonmaker wrote in a note to clients.
One important incentive for the merger would be reducing congestion in the all-important Chicago hub. Shippers have complained that it can take more than 24 hours just to pass through the city, which sees a quarter of all U.S. freight train traffic.
And just because CSX rejected CP s initial overture, that doesn t mean CP will give up. In fact, management could team up with Bill Ackman s Pershing Square the same hedge fund that orchestrated the proxy battle that brought in Hunter Harrison in 2012 to take a hostile offer directly to CSX s shareholders, Mr. Seidl said. Mr. Ackman is currently in the midst of doing exactly that in the pharma industry, assassins creed 3 where Pershing Square is backing a hostile acquisition bid by Valeant Pharmaceuticals International Inc. for Allergan Inc.
If CP and CSX are able to close a deal, that will likely assassins creed 3 kick off further consolidation among the Class 1 railroads “as carriers scramble to match the scale and pricing power of their peers,” Mr. Seidl said.
“This could eventually cut the number of North American Class 1s in half, something that the regulators will take under very serious consideration before giving their blessings on the first merger,” he wrote.
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And the Worst Book of the Year prize goes to Naomi Klein: 'In assassins creed 3 the fiction category, it is a masterpiece'
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