(Source: Norfolk Southern press release, December 15, 2015)
NORFOLK, Va. — Norfolk Southern Corporation (NYSE: NSC) today commented on Canadian Pacific’s response to the white paper prepared by former Surface Transportation Board (“STB”) commissioners Francis Mulvey and Charles Nottingham.
The Company noted that Canadian Pacific’s response is flatly wrong on the facts and the law, including its statement that the former STB commissioners did not consider the specific voting trust structure proposed by Canadian Pacific. In fact, former STB commissioners Mulvey and Nottingham did consider that structure in their December 7, 2015 white paper. They opined that, “[n]o matter how CP executives are put in charge of NS management before the merger is approved, the STB likely would not be fooled into thinking that CP and NS are operating independently.” The former STB commissioners also said they believe that any voting trust, however structured, is highly unlikely to be approved by the STB.
If Canadian Pacific is confident that its proposed voting trust structure would satisfy the twin legal tests — avoiding premature control and furthering the public interest — Canadian Pacific can seek a declaratory order to that effect from the STB.
As previously announced on December 14, 2015, Norfolk Southern rejected a revised, reduced proposal from Canadian Pacific to acquire the Company for $ 32.86 in cash and a fixed exchange ratio of 0.451 shares in a new company that would own Canadian Pacific and Norfolk Southern. After thorough consideration, Norfolk Southern’s board unanimously concluded that the proposal continued to be grossly inadequate, creates substantial regulatory risks and uncertainties that are highly unlikely to be overcome, and is not in the best interest of the Company and its shareholders.
Morgan Stanley & Co. LLC and Bank of America Merrill Lynch are acting as financial advisors to Norfolk Southern Corporation and Skadden, Arps, Slate, Meagher & Flom LLP, Hunton & Williams LLP and Morrison & Foerster LLP are acting as legal advisors.