Railroad News

Canadian Pacific appears to have dropped the proxy-fight strategy for its proposed acquisition of Norfolk Southern Corp. Yesterday, CP notified NS of its intent to submit a resolution to NS shareholders to ask the NS board to "engage in good faith discussions" with CP regarding the Class I's proposed takeover of NS, according to a Feb. 9 press release.

The shareholder resolution — which would be voted on at the NS annual meeting later this year — merely asks NS shareholders to formally vote "in favor of what they have been saying to CP anecdotally for months," CP said.

Canadian Pacific today released its third white paper on issues related to its proposed acquisition of Norfolk Southern Corp.

The latest paper, titled "CP-NS: A Comprehensive Approach to Regulatory Approval," details the comprehensive, merit-based process a railroad merger application would be subject to at the U.S. Surface Transportation Board, CP officials said in a press release.

The U.S. Surface Transportation Board (STB) has begun to receive letters from rail customers who are in favor of Canadian Pacific's proposed takeover of Norfolk Southern Corp.

Dakota Plains Holdings Inc. and multiple other shippers wrote last month to the STB to say they support CP's proposal to acquire NS. Until last week, most of the letters written to the STB were sent in opposition to the CP-NS merger.

Canadian Pacific announced Matthew Paull has been appointed to the board effective immediately, replacing Paul Hilal, who has resigned.

Hilal's departure coincides with his resignation from Pershing Square Capital Management L.P. A CP board member since 2012, Hilal chaired the board's Management Resources and Compensation Committee and was a member of the Finance Committee.

Canadian Pacific expects to reduce its workforce by about 1,000 employees in 2016, company officials said during an earnings conference call with analysts yesterday.

The job reductions are necessary to adjust to lower traffic volumes. Positions will be eliminated across the board, but most of the unionized positions will be eliminated by attrition, said Chief Executive Officer E. Hunter Harrison. Most of the cuts will have kicked in by the middle of 2016, he said.