UPDATE 2-Canada's CP Rail offers to buy Norfolk Southern
* Offers a "sizable premium in cash and stock"
* Expects a deal to win regulatory approval (Adds background, details)
Nov 17 (Reuters) - Canadian Pacific Railway Ltd said it offered to buy U.S. railroad operator Norfolk Southern Corp, as it looks to gain a foothold in the eastern United States.
Shares of Norfolk Southern, which has a market value of about $23.36 billion, were down slightly after rising as much as 6 percent in after-hours trading on Tuesday.
The proposal includes a "sizable premium in cash and stock" to Norfolk shareholders, Canadian Pacific said, without providing further details.
Canadian Pacific said it expects a green signal from the U.S. Surface Transportation Board and Canadian regulators for a deal.
However, regulators have not been very open to railroad mergers. Canadian National Railway Co's bid to buy Warren Buffett-owned Burlington Northern Santa Fe was blocked by U.S. regulators in 1999-2000.
Canadian Pacific's talks with CSX Corp, which also owns a large network across the Eastern United States, failed last year.
A deal would improve congestion around Chicago, Canadian Pacific said in the statement on Tuesday. Continued...