(Reuters) - U.S. railroad operator Norfolk Southern Corp formally rejected a revised offer from Canadian Pacific Railway Ltd, saying it was worth less than CP’s earlier proposal
The revised offer valued Norfolk Southern at $88.52 per share, based on Canadian Pacific shares’ closing price on Friday, Norfolk Southern said on Monday.
Norfolk Southern’s shares closed at $89.44 on Friday. They were trading marginally up at $89.78 in early trading on Monday.
Canadian Pacific’s proposal “continues to be grossly inadequate” and “nothing in the revised, reduced proposal addresses the concerns of the Norfolk Southern board,” the company said in a letter disclosed in a regulatory filing.
Canadian Pacific first made its offer for Norfolk Southern public on Nov. 17, valuing Norfolk Southern at about $94.94 per share, but met with an unenthusiastic response.
Canadian Pacific first offered $46.72 in cash and 0.348 of its shares for every Norfolk share.
In the revised bid, Canadian Pacific slashed the cash component to $32.86 and offered 0.451 of a share in a new holding company that would own both Norfolk Southern and Canadian Pacific.
Reporting by Amrutha Gayathri in Bengaluru; Editing by Sriraj Kalluvila