Will CP + NS Happen?

[ChessieFan]

Canadian Pacific has Ends Its Bid for Norfolk Southern as reported this evening.  Our Local Paper in Northwest Ohio has posted the story.  I posted a link to the story.
http://www.toledoblade.com/business/2016/04/11/Canadian-Pacific-ends-bid-to-buy-Norfolk-Southern.html

[eric220]

I guess I should revise my previous "it's over" statement. This round is over. Harrison has denied in interviews that they're going to go hostile, but who knows what other tactics they might try. Hopefully they'll try them on CSX.

[Blazeman]

Wall Street thinking focus will shift to a stock buy-back now for CP. Army's national defense concern was the end of it.

[jmarley76]

I still say KCS is a potential option for CP.

[Missaberoad]

I still say KCS is a potential option for CP.

I think that's a much more sensible option for CP, With the Kansas City connection they acquired from ICE it would give them the quickest route from Mexico's west coast ports to the US northeast / Port of Montreal. Considering Hunter's experience in that North/South corridor (coming from Illinois Central) I have to wonder why they haven't explored that...

Back when CP bought DME/ICE and Fred Greene was at the helm, the company rumor was KCS...

...but I suppose business will do what it will do Lol...

[Blazeman]

Back when CP bought DME/ICE

At that time, DME was involved in extending their reach into the Powder River Basin for coal traffic. Perhaps they were a front man for somebody, but in any case, the application was pulled a few years later. In hindsight, a good move with other news concerning coal noted on another thread. But CP by then had already made the buy.

Perhaps if the PRB project was still in play, CP would be looking at KCS. Right now, KCS developing vacant waterfront property in Port Arthur for crude and grain moves. CP would fit that like a glove along with fertilizer traffic from Alberta. A major infrastructure upgrade in capacity though would be necessary. The DME/ICE and CP routes are more/east west centric, not north/south, so excess miles and double tracking or long passing sidings would be needed for unit trains....the kind of RR'ng Hunter loves.

[Missaberoad]

At that time, DME was involved in extending their reach into the Powder River Basin for coal traffic. Perhaps they were a front man for somebody, but in any case, the application was pulled a few years later. In hindsight, a good move with other news concerning coal noted on another thread. But CP by then had already made the buy.

Perhaps if the PRB project was still in play, CP would be looking at KCS. Right now, KCS developing vacant waterfront property in Port Arthur for crude and grain moves. CP would fit that like a glove along with fertilizer traffic from Alberta. A major infrastructure upgrade in capacity though would be necessary. The DME/ICE and CP routes are more/east west centric, not north/south, so excess miles and double tracking or long passing sidings would be needed for unit trains....the kind of RR'ng Hunter loves.

It's funny how during the talks for the takeover such a big deal was made over the "Powder River connection" with CP even agreeing to large conditional payments to DME's owners if they build the line into Wyoming. Then within a couple years CP sold off the line in question. The DME was definitely acquired for their ICE holdings...

As for the infrastructure That is a very good point, hopefully Hunter has learnt from his time at CN and the mess he caused trying to run over siding length trains in both directions. Often a train would have to use two sidings and the crew would have to go back to get the front end of their train before continuing on. 

[Spikre]

 
  Jeff,
   KCS isn't for Sale!!
   to get KCS CP would have to buy the whole Conglomorate
   that owns KCS.
   if CP didn't have the bucks to buy NS or CSX,they sure
   don't have the money to buy Octo enterprizes that owns
   the Southern Belle.
      Spikre
       

[Missaberoad]

  Jeff,
   KCS isn't for Sale!!
   to get KCS CP would have to buy the whole Conglomorate
   that owns KCS.
   if CP didn't have the bucks to buy NS or CSX,they sure
   don't have the money to buy Octo enterprizes that owns
   the Southern Belle.
      Spikre
       

Keep in mind this is all "armchair quarterback" speculation based on Jeffs comments and some rumors I heard from mid level CP management 8 years and a CEO ago  

KCS is owned by KCS inc. which is publicly traded company with the largest shareholder owning 8.42% of the company
Its shares are trading around the same as NS (within 10$) with 1/3 the number of shares and is smaller in almost every measure. I may be missing something but I don't understand where your valuation comes from, or who Octo enterprises is? 

http://investors.morningstar.com/ownership/shareholders-major.html?t=KSU

Again I never stated its going to happen just that Imho it is a more sensible merger partner then NS or CSX.

Its fun to speculate about the business end and decisions that are made... 

[Spikre]

 
   Ryan,
    maybe that info is out of date,it was from a 60s or 70s
   article in Trains.
    but there must be a reason that theres been "Hands Off"
   on KCS thru the various spurts of Merger Madness.
    so who owns KCS "Perferred Stock" ?
   being owned by an Industrial was a reason that KCS had
   different arrangements with Unions,sort of similar to the USS
   Steel roads.
   if that has changed,when did the change occur ?
      Spikre
       
   

[Missaberoad]

I'm honestly not sure why KCS has survived, when you look at it it seems it would be a target of all of the big 6. I agree there must be a reason, I've heard the union theory before aswell...

I do know they spun off all of their non railway related assets around the turn of the century to build the capital to
gain full control of TFM and TexMex.

You bring up a bunch of questions I'd love to know more about...

[Lenny53]

I guess I should revise my previous "it's over" statement. This round is over. Harrison has denied in interviews that they're going to go hostile, but who knows what other tactics they might try. Hopefully they'll try them on CSX.

Hunter may well sit back and see if anything will come from NS 2Q results and the next shareholder meeting.

[Spikre]

 
   Ryan,
   maybe KCS has some sort of "Super Poisen Pill "
   CSX was said to make up a "Poisen Pill" after they
   failed to get 100% of Conrail.
    if any new info does turn up,it should be interesting.
    Spikre
     

[Missaberoad]

Spikre

I'm gonna dig through my books and see if I can dig up some KCS corporate history, I'll let you know
what I find, I'm sure Richard Saunders books will shed some light... 

[Blazeman]

I've been told KCS has a segment of their franchise they've never aggressively pursued for revenue: that being the Baton Rouge-New Orleans corridor. They have access and reciprocal switching agreements with most of the chemical complexes but are not seeking to compete for that traffic. They take what comes their way and are content to enjoy that revenue.