CP to seek shareholder support for Norfolk takeover talks

(Reuters) - Canadian Pacific Railway Ltd CP.TO said on Tuesday it planned to seek support from Norfolk Southern Corp's NSC.N shareholders to push the U.S. railroad's board to engage in takeover talks.

The Canadian Pacific railyard is pictured in Port Coquitlam, British Columbia February 15, 2015. REUTERS/Ben Nelms

The company said it intended to submit a resolution, which would be put to vote at Norfolk Southern’s annual shareholder meeting this year.

“We are not asking NS shareholders to vote on the existing proposal; we are simply asking them to vote in favor of having their board talk to us,” Canadian Pacific Chief Executive Hunter Harrison said in a statement.

Norfolk Southern has repeatedly rejected Canadian Pacific’s takeover offers, hoping to persuade shareholders that it is better off as a standalone company.

Further talks “are not in the best interests of NS shareholders unless CP offers NS shareholders compelling value,” Norfolk Southern said in a statement.

The company also said Canadian Pacific has not addressed the concerns of Norfolk board.

Opposition against the deal, initially valued at about $28 billion when its was first announced last November, has been mounting.

A number of industry groups, rail customers and a couple of the unions representing workers at Norfolk Southern have come out against the merger.

Canadian Pacific has been surprised by the force of the opposition to the deal, which reduces the chances of a successful hostile takeover, WSJ said.

The Wall Street Journal first reported Canadian Pacific’s plan to submit the resolution.

Reporting by Swetha Gopinath and Amrutha gayathri in Bengaluru; Editing by Anil D’Silva and David Gregorio