Norfolk Southern Corp. (NS) said today it has scheduled its annual shareholders meeting for May 12. On that date shareholders will vote on a proposal from Canadian Pacific Railway (CP) to request that NS' board meet with CP to discuss the merits of its proposed $28 billion offer to buy the U.S. eastern rail giant.
Canadian Pacific CEO E. Hunter Harrison has said the Calgary-based railroad would abandon its efforts to buy NS if its proposal is defeated. In a filing with the Securities and Exchange Commission, NS' board urged shareholders to vote against the resolution. Norfolk Southern, which has rebuffed three CP buyout offers over the past five months, has said it sees no reason to meet with CP under terms of the transaction currently before the board.
The CP resolution is nonbinding, meaning NS' board would not be required to meet even if the shareholders approved it. The companies have met once since Canadian Pacific made its first proposal in mid-November.
Norfolk, Va.-based NS has said repeatedly that the CP proposal is financially inadequate, would cause massive disruptions for users of an integrated network, and would likely not pass muster with government regulators on anticompetitive grounds.
The proposal has also met opposition from other U.S. railroads, shippers' groups, unions, and U.S. lawmakers. The overriding concern is that it would trigger a final and turbulent spasm of North American rail consolidation, leaving the continent with fewer than the seven large Class I railroads operating today.