ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, December 21, 1996 TAG: 9612230045
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
DATELINE: PHILADELPHIA
SOURCE: Associated Press
Conrail Inc. on Friday rejected Norfolk Southern Corp.'s $10.5 billion cash offer to buy the Northeast freight railroad company.
Conrail's board instead reaffirmed its commitment to a lower cash-and-stock offer proffered by railroad giant CSX Corp.
``The CSX transaction provides extraordinary value to our shareholders which would not have been available without the actions taken by the Conrail board,'' Conrail chairman David LeVan said.
CSX Chairman John Snow applauded Philadelphia-based Conrail's decision, saying CSX's bid ``addresses the interests of all of Conrail's constituencies.''
``Our objective has been to provide real value for Conrail's shareholders, provide competitive rail service throughout the East, grow the business, increase opportunities for our employees and generate far-reaching public benefits for the region,'' Snow said in a statement.
The battle over Conrail heated up Thursday when Richmond-based CSX added $870 million to its bid, bringing its offer for the company to $9.35 billion, or about $102 a share.
Norfolk Southern, based in Norfolk, responded by upping its bid to $10.5 billion from $10 billion. The new offer is worth $115 a share.
If either company wins Conrail, the merger will create the nation's No.3 freight carrier.
Following the new offers, Conrail postponed to Jan. 17 a shareholder vote on the bids. It had been scheduled for Monday.
Despite CSX's lower bid, Conrail officials have consistently said the CSX deal was a better strategic fit for the companies.
The U.S. government created Conrail in 1973 to run the operations of Penn Central and five other failed Northeast railroads. It operates an 11,000-mile rail freight network in 12 Northeastern and Midwestern states and the District of Columbia and Quebec.
CSX operates more than 18,000 miles of track in 20 states in the East, Midwest, South and in Ontario, Canada. Norfolk Southern operates a 14,500-mile rail system in 20 states and Canada, as well as a trucking company.
LENGTH: Short : 48 linesby CNB