CP's CEO says CSX and Norfolk Southern 'both work' as merger targets
MONTREAL (Reuters) - Canadian Pacific Railway Ltd (CP.TO: Quote) Chief Executive Officer Hunter Harrison on Wednesday said CSX Corp (CSX.O: Quote) has several strengths as a merger target, but stressed that he never made a formal offer for the U.S. railroad.
CP, which launched a $28 billion bid in November to merge with U.S. railroad Norfolk Southern Corp (NSC.N: Quote), could make an equal case for CSX, Harrison told the J.P. Morgan Aviation, Transportation & Industrials Conference in New York.
"They would both work for us."
Harrison acknowledged that CP had made mistakes in its bid for Norfolk Southern, which the railroad's board of directors has repeatedly rejected.
"One of the things that I'm wrestling with is clearly we made some mistakes along the way," he said, without identifying any specific errors.
CP has filed a shareholder proposal for Norfolk Southern's annual general meeting that calls for talks to be held between the two railroads. A date for the meeting has not been announced, although previous ones have been held in May.
"Presently this is kind of our last effort, the last thing we know to do and we hope it will work," Harrison said. "If not we're going to go back and run our railroad."
Earlier this month, CP said it was looking at all legal options in response to what it described as concerted efforts by certain U.S. railroads to block the proposed merger.
As a potential merger target, CSX, like Norfolk Southern, has a lot of strengths from a fiscal standpoint and because of the markets it serves, he said. Harrison said he had held a 90-minute meeting with CSX in 2014, but had not made a formal offer at the time, explaining that a merger would not work "culturally." Continued...