ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, October 3, 1996 TAG: 9610030042
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Speculation is growing that the Burlington Northern Santa Fe Corp. and Norfolk Southern Corp. may merge into the first true transcontinental railroad.
The theory is fueled by an unexplained 10 percent increase in NS stock over the past month to a record high of more than $91 per share, according to a report Wednesday in the Journal of Commerce, a newspaper that focuses on the transportation industry. The stock runup comes as shares of other railroads have languished, the paper said.
NS stock, trading on the New York Stock Exchange, rose $1.121/2 a share Wednesday, closing at $92.50.
Neither company would comment on the rumors. "No comment" also was the response of Burlington Northern and NS spokesmen last month when asked about merger rumors in light of BNSF's corporate jet being spotted at an airport in Norfolk, where Norfolk Southern has its headquarters.
The Journal said that BNSF Chairman Robert Krebs has signaled several times in recent months his interest in further rail acquisitions. The Burlington Northern Railroad and the Atchinson, Topeka and Santa Fe Railway Co. merged last year to form the BNSF.
Also this year, two major lines, the Union Pacific and the Southern Pacific merged to form the nation's largest railroad.
NS Chairman David Goode said last month during a speech at the Traffic Club of Chicago that rail mergers are likely to continue because of customer demands for better service, but he stopped short of saying that his own railroad had any such plans.
The Journal of Commerce reported that some people believe that BNSF would offer $110 per share for NS stock, making the deal worth $14 billion. The paper also said that others think there is more merger talk outside the two companies than inside.
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