CONRAIL VOTE GIVES NORFOLK A VICTORY.Byline: Charles V Charles V, duke of Lorraine Charles V (Charles Leopold), 1643–90, duke of Lorraine; nephew of Duke Charles IV. Deprived of the rights of succession to the duchy, he was forced to leave France and entered the service of the Holy Roman emperor. . Bagli The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Norfolk Southern Corp. won a significant victory Friday in the battle for control of rail freight in the East as Conrail shareholders rejected a measure that would have allowed the CSX CSX Chessie Seaboard Multiplier (railroad transportation company) CSX Cayman Islands Stock Exchange CSX Changsha, China (Airport Code) CSX Cardiac-Specific Homeobox CSX Seaboard Coastline Railroad Corp. to proceed with its $9.3 billion merger with the railroad. Norfolk Southern, which has made a hostile $10.5 billion bid for Conrail, said the vote at the special stockholders meeting in Philadelphia had sent a ``powerful message'' to Conrail's board that shareholders had endorsed its offer. Conrail's directors had asked shareholders to lift an anti-takeover provision and allow CSX to buy an additional 20 percent of Conrail. CSX already owns 19.9 percent. But the bidding war, already in its 102nd day, is far from over. CSX and Conrail have signed an agreement that contains a $300 million breakup fee breakup fee A provision in a takeover agreement that requires a firm to pay the investment banker a large sum of money if another firm takes over the target company. A breakup fee tends to discourage other firms from making bids for the target. and bars either side from negotiating with any other bidder until 1999. ``It's an important symbolic victory,'' said Anthony Hatch, a transportation analyst with NatWest Securities. ``But it's not a rejection of the CSX-Conrail merger; it's a rejection of the merger at this price and under these conditions. Yet it was a vote to keep the game alive, and that's good for Norfolk Southern.'' Up until now, Norfolk has been unsuccessful in challenging the friendly merger legally. Its victory Friday came about, in part, by its promise to pay shareholders $115 a share for 9.9 percent of Conrail shares if shareholders voted against the proposal. CSX is offering $110 a share for 40 percent of Conrail and a stock swap A stock swap also known as a share swap or equity swap is a business takeover in which the acquiring company uses its own stock to pay for the acquired company. for the remaining 60 percent. The official outcome of the shareholder vote may not be known until Monday, but Conrail conceded defeat, however temporary. Norfolk Southern contended Friday that shareholders with at least 53 percent of the company's stock outstanding had opposed the measure. ``Our superior offer should be allowed to go forward, and we're ready to have meaningful discussions with Conrail and CSX to that end,'' said David Goode David Goode (born 1971) is a British organist. He is organist and Head of Keyboard at Eton College, where he presides over a unique collection of historic instruments and teaches young organists; he combines this with a busy international concert career. , chairman of Norfolk Southern. ``But whatever happens we will move forward.'' CAPTION(S): Photo Photo: Conrail shareholders arrive for a meeting Friday in Philadelphia, where they rejected a measure to allow a merger with the CSX Corp. Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. |
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