(Dow Jones Newswires circulated the following story by Bob Sechler on March 3, 2010.)
KANSAS CITY, Mo. — The head of Kansas City Southern (KSU) said the railroad hasn’t been approached by any potential buyers since Warren Buffett’s deal to buy Burlington Northern Santa Fe Corp. was unveiled in early November.
“We’re not in any discussions with anybody about being acquired, I can tell you that,” Chief Executive Michael R. Haverty said in an interview Wednesday.
Shares of Kansas City Southern, down 24 cents recently at $34.87, have surged 45% since the Burlington Northern deal was announced, partly on buyout speculation.
Buffett’s Berkshire Hathaway Inc. (BRKA, BRKB) paid $26.5 billion for the portion of Burlington Northern that it didn’t already own, in a deal that closed last month.
Haverty said Wednesday that buyout rumors have periodically swirled around Kansas City Southern for years. But he said the railroad isn’t being shopped to potential acquirers and hasn’t been contacted by any in the wake the Burlington deal.
“What we do is we run the company,” said Haverty, who also is chairman. “We do the best we can and whatever happens, happens. Nobody has talked to us” about a possible deal.
Meanwhile, he voiced cautious optimism that the nascent economic recovery is gaining some traction.
Kansas City Southern’s U.S. volumes are up just under 4% so far in the first quarter, he said, while its Mexico volumes are up nearly 25%. Overall volume was off 1% in the fourth quarter, compared to the year-ago period.
Haverty stressed that the increase in Mexico is in comparison to a dismal 2009 first quarter, when the country’s manufacturing sector “just almost shut down” amid the broad economic downturn. Still, he said the trends are positive.
“When I look at the overall economy, I see a very slow kind of recovery,” Haverty said. “If that continues, quite frankly, I think we’re satisfied with that.”
Kansas City Southern previously has forecast a 10% to 14% increase in revenue this year on volume and pricing gains, which Haverty reiterated Wednesday.