Canadian Pacific is vowing to continue its fight to buy Norfolk Southern after its second bid was rejected. Bobbi Rebell reports.
Canadian Pacific not giving up on its bid for Norfolk Southern. After a second bid for its smaller rival was rejected, executives touted the benefits of a deal on a call with analysts. In an unusual move, shareholder and activist investor Bill Ackman joined them. They made it clear they would go directly to shareholders to get the deal done. Reuters' Allison Lampert: SOUNDBITE: ALLISON LAMPERT, REUTERS REPORTER (ENGLISH) SAYING: "I think the big question is going to be how will the shareholders react. Will we see some activist shareholders from Norfolk Southern expressing their discontent with the board's decision and whether they may want to challenge that was what was thrown down today by CP. " CP's move sent both stocks down. Norfolk Southern was one of the days' biggest losers on the S&P 500. Hunter Harrison, who leads CP, has a reputation as a railroad turnaround expert, and has cut costs dramatically there. Norfolk Southern rejects the deal with its argument that it won't get past regulators, who have been resistant to rail mergers. It cited a white paper by two former Surface Transportation Board commissioners that said regulatory approval would be incredibly hard to obtain. To alleviate regulatory concerns, CP said it was prepared to close the transaction using a voting trust. Basically, a voting trust is a holding company in which each company would operate independently until a deal was approved but still be able to eke out cost savings. Norfolk Southern said it reviewed the new structure and did not believe a deal would be approved.