UPDATE 5-Norfolk board rejects Canadian Pacific's $28.4 bln offer

Fri Dec 4, 2015 5:30pm EST
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* Norfolk says offer inadequate, will face antitrust hurdles

* Deal unlikely at "any offer price" - Norfolk CEO

* Canadian Pacific says disappointed with Norfolk rejection (Adds Canadian Pacific comments and share close)

By Ankit Ajmera and Sneha Banerjee

Dec 4 (Reuters) - U.S. railroad operator Norfolk Southern Corp said on Friday its board had rejected Canadian Pacific Railway Ltd's $28.4 billion offer, calling it "grossly inadequate" and could face substantial regulatory hurdles.

A struggling coal transportation market, suppressed by weak market demand and global oversupply, has weighed on the earnings of Norfolk, making it more vulnerable as a takeover target. But on Friday the company put forward a passionate defense of why it should go it alone.

"The board believes that Canadian Pacific's proposed transaction is opportunistically timed to take advantage of Norfolk Southern's market valuation," Norfolk Chief Executive James Squires said on a conference call with analysts.

He added that the regulatory hurdles would remain the same "at any offer price".

Canadian Pacific said late on Friday it was disappointed with Norfolk's rejection of its proposal, and reiterated that it was committed to the deal and looked forward to engage with Norfolk's leadership and its shareholders.   Continued...