The 17th year of the Canadian Pacific Holiday Train program “saw tremendous crowds, generous donations and big smiles as it etched its way across Canada and the northern U.S.,” according to CP. “With results continuing to roll in, the 2015 edition of the Holiday Train is on track to raise more than $1.4 million and more than 300,000 pounds of food for food banks and food shelves.”
The critical takeaway from enactment in December of the Surface Transportation Board Reauthorization Act, S.808, is that, absent headline-capturing abuse of captive shippers by railroads, it is unlikely Congress will refocus anytime soon on diluting railroad market power.
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:
The James R. Hoffa Memorial Scholarship Fund is now accepting applications for scholarship awards, the Brotherhood of Locomotive Engineer and Trainmen (BLET) announced on Dec. 18, 2015. The deadline for receipt of completed materials is March 31, 2016.
Santa Claus doesn’t rest on Christmas Eve. Neither, apparently, does Canadian Pacific. Santa does rest on Christmas Day, but the Class I railroad whose headquarters is, of all its contemporaries (with the exception of the Alaska Railroad), closest to Kris Kringle’s North Pole residence and workshop has chosen not to follow his lead.
As Canadian Pacific continues to pursue a merger with Norfolk Southern, CP CEO Hunter Harrison sent a response to the members of the Illinois Congressional delegation (all Democrats) who sent a letter to the Surface Transportation Board on De. 14, 2015 expressing concerns about the potential transaction.
According to Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl, “The addition of a contingent value right (CVR) is Canadian Pacific’s way of providing Norfolk Southern shareholders with an insurance backstop, another effort by the Canadian Class I to put its money where its mouth is.”
Rail industry cogitation focuses so far on Canadian Pacific’s (CP) prospects for securing Surface Transportation Board (STB) approval for its—at first friendly and now increasingly hostile—attempt to take over Norfolk Southern (NS). Unremarked has been the even-less predictable, but equally essential, attitude of Canada’s transportation and business regulators to a deal that would see one of the country’s two Class I’s disappear into the alphabet soup of American megamergers.
The rail industry and its many observers have been absorbed by the Canadian Pacific Railway’s pursuit of Norfolk Southern. Without recounting the entire story, the whole scenario (minus the regulatory stew that would be an integral part of any Class I merger) is a classic “boy meets girl” scenario with a twist.
Canadian Pacific (CP) on Dec. 16, 2015 announced a “revised, enhanced offer” in its bid to acquire Norfolk Southern (NS). The revised offer consists of, for each NS share, U.S.$32.86, 0.451 shares of stock in the combined CP-NS, and 0.451 of a contingent value right (CVR) worth a maximum $25. In response, NS said its board of directors “will carefully consider the publicly disclosed, revised proposal from CP with the assistance of its financial, legal and regulatory advisors.”