CP Canadian Pacific Kansas City Limited

   (FROM THE WALL STREET JOURNAL 2/10/16) 
   By Jacquie McNish and Laura Stevens 

Canadian Pacific Railway Ltd. backed away from a threatened proxy battle to unseat Norfolk Southern Corp. directors, opting to enlist the Virginia rail operator's shareholders to press the board for friendly merger talks.

Canadian Pacific said it would submit a nonbinding resolution to the company's coming shareholders' meeting calling for the board to start negotiations. The Calgary, Alberta-based railway has been surprised by the force of opposition to the deal, according to a person familiar with its plans.

"We believe this shareholder resolution is the clearest, fairest approach to a process that will result in an outcome beneficial to all stakeholders," Canadian Pacific said in a statement on Tuesday.

Norfolk Southern said it wouldn't support further discussions barring an offer with "compelling value" that addresses regulatory issues.

The Norfolk, Va., company's stock rose 1%, or 93 cents, to $71.42, and Canadian Pacific gained 1.9% to $124.10, both in 4 p.m. New York trading on Tuesday.

Canadian Pacific's retreat from pursuing a hostile takeover reflects its dwindling options after a three-month campaign that has failed to draw wider support. Its bid is backed by activist investor William Ackman, who sits on the Canadian railroad's board and whose hedge fund owns about 9% of its shares.

Norfolk Southern's board has dismissed the hostile bid as inadequate and unlikely to win approval of regulators in a process that is expected to last years.

(END) Dow Jones Newswires

February 10, 2016 02:47 ET (07:47 GMT)

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