THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Thursday, January 16, 1997 TAG: 9701160461
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: 36 lines
It's all in the hands of Conrail Inc. shareholders now.
A federal appeals court on Wednesday rejected a request by Norfolk Southern Corp. to block a Friday vote by Conrail shareholders. The shareholders will decide on the Philadelphia-based railroad's proposed merger with CSX Corp.
Despite the legal setback, Norfolk Southern officials are confident going into the vote.
``We feel very optimistic about our chances of prevailing and we look forward to being there on Friday,'' said Robert Fort, a Norfolk Southern spokesman.
Norfolk Southern had wanted to delay the vote until the U.S. 3rd Circuit Court of Appeals in Philadelphia heard its appeal of a Jan. 9 decision by a lower court. That decision approved a provision of the CSX/Conrail merger that prohibits Conrail from talking to alternative buyers until 1999.
Norfolk Southern is trying to block the $9.2 billion CSX/Conrail merger with its $10.3 billion counter bid for Conrail.
Although Norfolk Southern's offer is richer, Conrail executives and directors want to merge with CSX.
Without significant changes in the proposed merger, a CSX/Conrail combination would put Norfolk Southern in a deep competitive hole.
Norfolk Southern's hopes now lie with Conrail shareholders rejecting the CSX merger.
It hopes a negative vote on the CSX merger might send a message to Conrail's board of directors to find a way to negotiate with Norfolk Southern.
Norfolk Southern has been lobbying Conrail shareholders in meetings and through advertisements and direct mail to support its effort to buy Conrail.
KEYWORDS: CONRAIL CSX NORFOLK SOUTHERN MERGER