CP filed a definitive proxy statement on March 29 for the proposed resolution, and also sent a letter to NS shareholders arguing that a merger would generate significant value.
"CP has consistently stated that we are open to discussing all terms of a potential deal, including price, but we can't negotiate with ourselves," CP CEO Mr Hunter Harrison said on March 29. "Given we have also asked the Surface Transportation Board for a declaratory order on the voting trust model we were pleased to hear that Norfolk Southern may now be willing to engage in direct face-to-face discussions."
However, the merger has been fiercely resisted by NS and freight customers, and opposition to the merger has continued to build in the United States in recent weeks. On April 5 Mr Bill Schuster, chairman of the House Transportation and Infrastructure Committee rejected CP's proposal arguing the combination would not be in the best interests of the freight transport system, railway employees, or short line railways.
On April 8 the United States Department of Justice and the Department of Defense wrote to the Surface Transportation Board urging it to reject the merger proposal.
CP had been seeking a declaratory order from the STB regarding the use of a voting trust pending the STB's review of the merger. Under the proposed arrangement CP, the acquiring firm, and not NS, the takeover target, would have be been placed in trust.
"We have long recognised that consolidation is necessary for the North American rail industry to meet the demands of a growing economy, but with no clear path to a friendly merger at this time, we will turn all of our focus and energy to serving our customers and creating long term value for CP shareholders," Harrison said in a statement on April 11.
