NSC Urges Employees Vote Against CP Proposal On Board Entering Combination Talks

Norfolk Southern Corp. (NYSE: NSC) is encouraging employees to vote against the efforts of Canadian Pacific Railway Limited (USA) (NYSE: CP) at its May 12 annual meeting to press the board for engaging in a friendly takeover talks with Canadian Pacific.

In a letter to employees filed with the SEC, Norfolk Southern Chief Executive Jim Squires said the company is making good progress on its restructuring plans, and employees should not vote on merger talks.

"We have made substantial headway over the last few months on our plan to improve performance, which balances revenue growth through pricing and volume and a variety of expense reduction and cost control initiatives. We expect to achieve annual productivity savings of more than $650 million per year by 2020, growing from an initial $130 million in 2016," the filing said.

Related Link: 8-K From Norfolk Southern Shows Message From Chair, Pres, CEO Jim Squires To Co. Employees

In a proxy filing, Norfolk Southern's board said it reviewed each of Canadian Pacific's proposals, and determined they were "grossly inadequate, substantially undervalued Norfolk Southern, and would face substantial regulatory risks and uncertainties that would be highly unlikely to be overcome."

In November, Canadian Pacific launched its roughly $30 billion takeover bid for Norfolk Southern, but was rejected.

At time of writing, shares of Norfolk Southern were up 1.47 percent at $82.95, and Canadian Pacific shares were up 1.77 percent at $130.38.

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