Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, November 30, 1994 TAG: 9411300060
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: The Washington Post
DATELINE: WASHINGTON LENGTH: Medium
Santa Fe already has a merger agreement with Burlington Northern Corp. to form a giant system to compete with Union Pacific and has been fending off Union Pacific's counteroffers. But Tuesday, Santa Fe announced it would meet with Union Pacific ``in an effort to clarify and improve Union Pacific's offer.''
A Santa Fe shareholder meeting planned for Friday to vote on the Santa Fe-Burlington Northern merger was postponed until Dec. 16.
``We've been knocking on the door, and someone answered,'' said Union Pacific spokesman Gary Schuster.
The announcement came the day after the Interstate Commerce Commission approved Union Pacific's plan to use a voting trust to purchase Santa Fe stock. This would give Santa Fe shareholders their money up front, protecting them in case the ICC rejected a Union Pacific-Santa Fe combination.
The two railroads have some largely parallel lines, and proposed mergers of parallel lines often have been regarded as anticompetitive by the ICC. A Santa Fe-Burlington Northern combination, on the other hand, would have little overlap.
Union Pacific is basing its offer on a higher value offer - now valued at $16.93 a share in cash and stock vs. Burlington Northern's $15.98 a share in stock - plus assurances that it will make enough concessions to other railroads to gain ICC approval.
At the same time it agreed to talk to Union Pacific, Santa Fe also adopted a complicated ``shareholder rights plan'' that appears to be a form of antimerger ``poison pill'' provision, although Schuster said Union Pacific initially is confused as to exactly what it means.
by CNB