Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl reports on a recent dinner conversation with “a large private shipper” that focused on the proposed Canadian Pacific-Norfolk Southern merger, rail pricing, railcar sourcing, and the U.S. economy. Following are his observations:
“Take Canadian Pacific (CP) CEO Hunter Harrison out of the equation and CP’s offer to Norfolk Southern (NS) and its shareholders would have little chance of getting anywhere, in our opinion,” said Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl.
About 71% of rail shippers surveyed by Cowen and Company do not support a merger between Canadian Pacific (CP) and Norfolk Southern (NS), even though opposition to a Class I merger per se has dropped, the company reported on Dec. 7, 2015.
Canadian Pacific Railway has held early-stage merger talks with Norfolk Southern and is raising financing for an acquisition, according to Nov. 9, 2015 news reports citing confidential sources at both carriers. NS stock jumped 11%, the most since 2008, to $88.62 at the close of the New York Stock Exchange, while CP’s 5.7% rally to C$188.79 on the Toronto Stock Exchange was its biggest gain since 2013.
Cowen and Company’s 8th Annual Global Transportation Conference featured presentations by publicly traded U.S. railroads as well as a panel discussion on the railcar industry. In general, traffic levels appear to be recovering in several sectors, with modest growth expected in 2015’s second half and into 2016.
CSX Chief Sales and Marketing Officer Fredrik Eliasson, formerly the company’s CFO, on Sept. 9, 2015 reviewed performance to date and updated investors on the company’s third-quarter and full-year expectations at the Cowen and Company 8th Annual Global Transportation Conference in Boston, Mass.