UPDATE 2-Norfolk Southern rejects Canadian Pacific's revised offer
Dec 14 (Reuters) - U.S. railroad operator Norfolk Southern Corp formally rejected a revised offer from Canadian Pacific Railway Ltd, raising the prospect of a proxy battle.
CP shareholder Bill Ackman said last week that CP Chief Executive Hunter Harrison and he have both been sounded out by activists interested in a proxy fight with Norfolk Southern.
Ackman and Harrison also said if necessary they will take the proposed merger directly to shareholders.
Ackman's hedge fund, Pershing Square Capital Management, holds 9.12 percent of CP, according to Thomson Reuters data.
Norfolk Southern said on Monday the revised offer was worth less than CP's earlier proposal.
The revised offer valued Norfolk Southern at $88.52 per share, based on CP stock's closing price on Friday, Norfolk Southern said.
At that price, the revised offer valued Norfolk Southern at $26.8 billion. CP's original proposal was worth $28.4 billion.
Norfolk Southern's shares closed at $89.44 on Friday. They were trading up 1 percent at $90.50 in early trading on Monday. Continued...