ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Thursday, January 9, 1997 TAG: 9701100045
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
IF THIS PROVISION is allowed to stand, Conrail will be unable to consider another merger for two years.
Norfolk Southern Corp. today will attempt to convince a federal district judge in Philadelphia to throw out a provision of the proposed merger agreement between CSX Corp. and Conrail Inc. that prevents the Conrail board of directors from considering a competing offer from any other railroad - including one from Norfolk Southern - before 1999.
CSX and Conrail extended that "lockout" date, which had been set for this coming July, when CSX increased its bid for Conrail to $9.3 billion in cash and CSX stock on Dec.18. Norfolk Southern's current bid for Conrail - also made on Dec.18 - is worth roughly $10.5 billion, all of it in cash.
Conrail shareholders are scheduled to vote on Jan.17 whether to go ahead with the CSX-Conrail merger, and they may not be willing to wait for two years on Norfolk Southern, should NS lose its effort to overturn the "lockout" provision.
Besides the federal court, NS has asked the federal Surface Transportation Board to strike down the provision, arguing it gives unlawful control of one railroad over another. The board is the nation's railroad regulator.
In a related matter, NS on Wednesday extended its $115 per share hostile offer for Conrail stock through midnight Friday, Jan.24. NS said that 2,568,000 Conrail shares had been tendered and not withdrawn in response to NS's offer as of Tuesday afternoon.
NS and CSX are fighting for Conrail because it dominates rail traffic in the lucrative Northeast, including the New York market. Shippers and others have voiced concerns about a rail monopoly resulting from any merger with Conrail.
LENGTH: Short : 40 linesby CNB