THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, April 20, 1996 TAG: 9604200353
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BLOOMBERG BUSINESS NEWS
LENGTH: Short : 42 lines
Conrail Inc. isn't in talks to be acquired by Norfolk Southern Corp. or any other railroad, said David LeVan, Conrail's chief executive and president.
Speculation that Norfolk Southern would make a bid for Conrail has made the rounds on Wall Street for several months, and at times has boosted Conrail's stock price. Norfolk Southern's service territory borders Conrail's to the south. ``Conrail is not for sale,'' LeVan said.
Instead, Philadelphia-based Conrail is attempting to expand on its own, LeVan said. Earlier this month, Conrail said it offered $1.5 billion for some key rail lines in Texas owned by Southern Pacific Rail Corp., which is in agreement to be acquired by Union Pacific Corp. The offer was rejected by the two railroads, Conrail said.
In a filing with the Surface Transportation Board, the federal agency that must OK the merger, Conrail said the Union Pacific deal would be anti-competitive and would cause shipping rates to rise. Conrail asked the STB to force Southern Pacific to sell the Texas lines before backing the merger.
The rail lines that Conrail wants to buy are important because they serve the heavily industrial Texas Gulf region, a lucrative market for railroads. The lines also connect the U.S. with Mexico. LeVan said Conrail wouldn't accept an offer granting it trackage rights, which would allow it to run its trains over Southern Pacific's lines.
Burlington Northern Santa Fe Corp., the nation's largest railroad, has already agreed to share 3,800 miles of Union Pacific and Southern Pacific track in exchange for not opposing the merger.
LeVan said Conrail considered making an offer for all of Southern Pacific, but decided against it. Southern Pacific's other lines, which extend all the way to the Northwest, are too far-reaching and don't mesh well with Conrail's current rail system, LeVan said. by CNB