It would have cost about US$30 billion and expanded CP’s rail network, especially in the eastern USA and the Chicago area where there is a major rail hub.
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CP initially expressed its interest in acquiring NS in November 2015, explaining it believed the combined railroad would offer unparalleled customer service and competitive rates that would support the success of shippers and industries it serves and also satisfy U.S. Surface Transportation Board and Canadian regulators.
Morningstar feels “trans-U.S. mergers make sense”, according to Schoonmaker, but have not been proposed by any of the four big US railroad operators. Bill Shuster, the chairman of the House transportation committee, was among lawmakers who expressed concern over the takeover plan.
Customers including package delivery companies FedEx Corp and United Parcel Service Inc opposed the bid out of fears that CP’s plans to cut costs would hurt rail services.
Analyst Jason Seidl, Cowen & Company, wrote a note to investors that the Justice Department’s letter was what “broke the camel’s back”. “Presumably, it was the DOJ’s opinion last week that broke the camel’s back”. Yahoo has set an April 18th deadline to submit bids with offers expected from multiple parties including Verizon (VZ).
Analysts presently have an $84.70 price target on the company’s stock, however taking a broader look brokerage firms’ analysts on the street with an anticipative view have high price target of $96.00 and with a conventional view have low price target of $65.00 based on 20 opinions. Finally, Nippon Life Global Investors Americas Inc. purchased a new position in shares of Canadian Pacific Railway Limited during the fourth quarter valued at approximately $3,760,000. The award goes to chemical manufacturers and plants that ship at least 1,000 carloads of hazardous products over the railroad without a single incident for the year.
But that’s not to say Norfolk Southern shareholders can’t press “for something else involving Hunter Harrison”, the first analyst said, though he declined to elaborate. Although the 71-year-old CEO was rebuffed again in January when he tried to revive the CSX talks, he said this March that he was still interested in the USA carrier.
A Norfolk Southern spokesperson wasn’t immediately available for comment Monday morning.
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Canadian Pacific has been aiming to create a transnational railroad that stretches from the Canadian West Coast to the U.S. Gulf Coast and Atlantic, to help eliminate bottlenecks at busy rail hubs. Canadian Pacific was up $4.58 a share to $139.37 after it announced it would give up on the merger.
