CONRAIL VOTE GIVES NORFOLK A VICTORY.Byline: Charles V. Bagli The New York Times Norfolk 1, 2 nôr`fək; 2 nôr`fôk'). 1 City (1990 pop. 21,476), Madison co., NE Nebr., on the Elkhorn River; inc. 1881. A trade and railroad center in a fertile farming region, it has a livestock market. Its industries produce animal feeds, food and beverages, and electronic products. 2 City (1990 pop. 261,229), independent and in no county, SE Va. 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 - Cardiac-Specific Homeobox CSX - Cayman Islands Stock Exchange CSX - Changsha, China (Airport Code) 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 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 Friendly Merger A business combination that the management of both firms believes will be beneficial to stockholders. 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 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, 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 |
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