CP seeks order from regulator on deal structure for Norfolk buy
(Reuters) - Canadian Pacific Railway Ltd (CP.TO: Quote) (CP.N: Quote) said it would seek an order from the U.S. federal rail regulator confirming the viability of a complex deal structure that it intends to use in its proposed takeover of Norfolk Southern Corp (NSC.N: Quote).
The rarely used deal structure, known as a voting trust, would allow Canadian Pacific and Norfolk Southern to remain independent until their merger gets regulatory approval, but allows the U.S. railroad's shareholders to get paid before the deal closes.
The U.S. Surface Transportation Board (STB) would need to approve the voting trust before beginning the deal review process. Norfolk Southern, which has repeatedly rebuffed Canadian Pacific, has said it does not believe the voting trust will be approved.
"We are skeptical that the STB will give a definitive ruling, especially when NS will not even sit down with us, but we are willing to go the extra mile if that is what it takes to get NS to the table," Canadian Pacific Chief Executive Hunter Harrison said in a statement.
The Canadian company's $28 billion offer to buy Norfolk Southern, first disclosed in mid-November, is facing opposition from a number of industry groups, rail customers and a couple of the unions representing workers at Norfolk Southern.
Democrats from Pennsylvania's congressional delegation sent a letter to the STB earlier this month, raising concerns about impact of the proposed merger and the voting trust structure.
(Reporting by Swetha Gopinath in Bengaluru; Editing by Maju Samuel)
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