
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 14, 1990                   TAG: 9003143061
SECTION: BUSINESS                    PAGE: A11   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: RICHMOND                                 LENGTH: Medium

RF&P INVESTOR SUES

Concerns that the price CSX Corp. has offered for RF&P Corp. stock may be too low have prompted a lawsuit by an RF&P stockholder seeking to block the proposed merger of the two railroads.

In a suit filed Tuesday in Richmond Circuit Court, Alan R. Kahn, the RF&P stockholder and chief executive officer of the New York investment firm of Kahn Brothers & Co. Inc., said, "CSX's offer of either $34.50 cash or a share of CSX stock for each share of RF&P stock significantly undervalues RF&P's worth."

Kahn said some analysts have valued RF&P stock as high as $56 a share.

The merger plan "is moving ahead very rapidly," Kahn said. "Because CSX owns a controlling interest in RF&P, I believe that CSX owes a duty to the RF&P stockholders not to take unfair advantage of them."

Kahn's suit named CSX, RF&P and the directors of RF&P as defendants, among others.

Meantime, Gov. Douglas Wilder said Tuesday that a New York financial firm had been hired to study the proposed merger that was announced Feb. 20.

Mark Boyer and Company Inc. will produce an independent analysis of the CSX offer and will recommend by early April whether the state should accept the offer, Wilder said in a news release.

The state owns about 20 percent of RF&P stock through the Virginia Supplemental Retirement System, a $10 billion fund that provides the pensions for state employees and some local government workers.

The merger will require two-thirds approval by shareholders in each of three classes of RF&P stock. CSX has a controlling interest in RF&P common stock but has less than one-third interest in the other two classes.

The General Assembly will decide April 18 whether to approve the sale on behalf of the state, and other RF&P shareholders will vote on the deal later in the spring.

CSX officials have defended the merger offer.

"We are absolutely not going above $34.50 that's been put on the table," CSX Senior Vice President Mark Aron said. "That's it for us."

by CNB