Canadian Pacific to revise terms of bid for Norfolk Southern -WSJ

Dec 7 (Reuters) - Canadian Pacific Railway Ltd CP.TO (CP
Rail) is expected to revise deal terms for its acquisition of
Norfolk Southern (N:NSC) NSC.N , to allay fears of a prolonged
regulatory review and put cash earlier in shareholders' hands,
the Wall Street Journal reported, citing people familiar with
the matter.
In its revised bid, CP Rail is expected to offer $32.86 in
cash and .451 of a share in a new holding company that would run
the two railways, as against its previously rebuffed offer of
$46.72 and .348 shares for each Norfolk share, the WSJ reported.
(http://on.wsj.com/1SKLLZG)
Shareholders could be paid as soon as May, provided the
regulators approve a temporary trust structure that would keep
the two companies independent as the regulatory process, which
could take up to two years, gets underway, the Journal said.
JPMorgan Chase (N:JPM) JPM.N , CP Rail's banker, has committed $10
billion to finance the merger, the paper said.
CP Rail, Norfolk Southern and JPMorgan could not be
immediately reached for comment outside regular business hours.
Based on the findings of two former Surface Transportation
Board (ST) commissioners it retained, Norfolk released a report
on Monday night saying the merger was "highly unlikely to be
approved by the ST".
Norfolk added that the STB would not approve of the merger
or a voting trust structure as "neither would be in the public
interest" and that its strategic plan to take the company
forward is superior to CP Rail's "grossly inadequate and
high-risk proposal".
Last week, Norfolk rejected CP Rail's $28.4 billion takeover
offer saying the bid would face regulatory hurdles "at any offer
price".
Responding to the rejection, CP Rail said it would hold a
conference call on Dec. 8 to discuss "clarity, context and
detail" of its offer and "correct every inaccuracy".
Activist investor William Ackman, who holds a 9.1 percent
stake in CP Rail and is a big advocate of consolidation in the
North American railway sector, will join the company's Chief
Executive Hunter Harrison in the conference call.