19.02.2016, 00:13
CP Files Shareholder Proposal for Norfolk Southern Annual Meeting
OREANDA-NEWS. Canadian Pacific notified Norfolk Southern Corp. (NS) of its intent to submit a resolution to NS' shareholders to ask their board of directors to engage in good faith discussions with CP regarding a business combination transaction involving CP and NS that would create a true end-to-end transcontinental railroad that would enhance competition, benefit the public and drive economic growth.
NS shareholders have been telling CP from the beginning that their own board should, at the very least, talk to CP about a potential combination. CP's shareholder resolution to NS asks shareholders to formally vote in favour of what they have been saying to CP anecdotally for months.
Further, while some NS shareholders have asked CP to nominate an alternative slate of directors for the NS board to help initiate a transaction, we believe this shareholder resolution is the clearest, fairest approach to a process that will result in an outcome beneficial to all stakeholders.
"We are not asking NS shareholders to vote on the existing proposal; we are simply asking them to vote in favour of having their board talk to us," said E. Hunter Harrison, CP's Chief Executive Officer. "We continue to believe in the potential to create a transcontinental railroad with NS and believe this is a fair and measured approach to getting a deal done."
The shareholder resolution will be voted on at the NS annual meeting later this year. NS' prior annual meeting was held on May 14, 2015.
CP's proposal to NS, which includes a sizable premium in cash and stock offered to NS shareholders, would result in a company with the potential for faster earnings growth than either CP or NS could achieve on their own, all while delivering enhanced service to customers and maintaining a strong investment grade credit rating.
"Shareholders and analysts will be watching NS closely throughout 2016 and if they continue to underperform, the pressure to work with CP will only grow," said Harrison. "Our model performs in good times and bad, consistently driving shareholder value during the peaks and the valleys - surely that kind of performance is what shareholders would expect their board to deliver and they can only deliver it by working with us."
CP strongly believes that a combined railroad would offer unparalleled customer service and competitive rates that will support the success of the shippers and industries it serves, and satisfy the U.S. Surface Transportation Board and Canadian regulators. In direct discussions with NS, CP could also be able to work with NS on the optimal means to obtain regulatory approvals for the transaction.
NS shareholders have been telling CP from the beginning that their own board should, at the very least, talk to CP about a potential combination. CP's shareholder resolution to NS asks shareholders to formally vote in favour of what they have been saying to CP anecdotally for months.
Further, while some NS shareholders have asked CP to nominate an alternative slate of directors for the NS board to help initiate a transaction, we believe this shareholder resolution is the clearest, fairest approach to a process that will result in an outcome beneficial to all stakeholders.
"We are not asking NS shareholders to vote on the existing proposal; we are simply asking them to vote in favour of having their board talk to us," said E. Hunter Harrison, CP's Chief Executive Officer. "We continue to believe in the potential to create a transcontinental railroad with NS and believe this is a fair and measured approach to getting a deal done."
The shareholder resolution will be voted on at the NS annual meeting later this year. NS' prior annual meeting was held on May 14, 2015.
CP's proposal to NS, which includes a sizable premium in cash and stock offered to NS shareholders, would result in a company with the potential for faster earnings growth than either CP or NS could achieve on their own, all while delivering enhanced service to customers and maintaining a strong investment grade credit rating.
"Shareholders and analysts will be watching NS closely throughout 2016 and if they continue to underperform, the pressure to work with CP will only grow," said Harrison. "Our model performs in good times and bad, consistently driving shareholder value during the peaks and the valleys - surely that kind of performance is what shareholders would expect their board to deliver and they can only deliver it by working with us."
CP strongly believes that a combined railroad would offer unparalleled customer service and competitive rates that will support the success of the shippers and industries it serves, and satisfy the U.S. Surface Transportation Board and Canadian regulators. In direct discussions with NS, CP could also be able to work with NS on the optimal means to obtain regulatory approvals for the transaction.
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