Canada: Norfolk Southern hostile to Canadian Pacific’s $28.4 billion bid

US railroad operator Norfolk Southern all but rejected a $28.4 billion acquisition offer by Canadian Pacific Railway on Tuesday, calling it “low-premium” and warning it would face significant regulatory hurdles.

While Norfolk Southern said it would carefully evaluate the offer, its sour response represents a setback to Canadian Pacific as well as its largest shareholder, William Ackman’s activist hedge fund Pershing Square Capital Management.

Ackman, a big advocate of consolidation in the North American railway sector, recruited Hunter Harrison, who had previously been chief executive officer of Canadian National Railway, as CEO of Canadian Pacific in 2012.

In a statement earlier on Tuesday announcing its offer to Norfolk Southern, Canadian Pacific argued that the combined railroad would offer unparalleled customer service and competitive rates for shippers, and that it would satisfy the US Surface Transportation Board (STB) and Canadian regulators.

Full content: Reuters

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