U.S. rail regulator releases letters backing CP's Norfolk Southern bid

CHICAGO, Jan 29 (Reuters) - The U.S. federal rail regulator
that would have to review any merger of Canadian Pacific
CP.TO and Norfolk Southern Corp (N:NSC) NSC.N made public a number
of letters on Friday from railroad customers backing the deal.
The Surface Transportation Board (STB) posted letters from
half a dozen companies backing the bid, adding to similar
letters it released earlier this week.
This comes after a number of rail customers wrote to the
regulator asking the STB to reject a merger, arguing that it
would lead to underinvestment in Norfolk Southern's network and
cause a flurry of mergers that would result in an
anti-competitive North American duopoly.
A number of prominent U.S. Democrats have also urged the
rejection of CP's bid.
The Canadian company in mid-November disclosed its $28
billion offer to buy Norfolk Southern.
Norfolk Southern has rejected the Canadian railroad's
advances, setting the stage for possible proxy battle.
The letters posted by the STB on Friday include one from
EACOM Timber Corp, which operates sawmills in Quebec and
Ontario.
EACOM's vice president for sales and marketing, Stephane
Boileau, wrote that a merger "would create a transcontinental
railroad with the scale and reach to deliver improved levels of
service to us."
The release of the letters comes as both railroads seek to
persuade shareholders and other stakeholders that theirs is the
best solution.
Canadian Pacific has met with more than a dozen of the
largest shipping organizations with offices in the Washington
area, a spokesman said.
"We are continuing to reach out to all key stakeholders with
the facts of the proposed combination," spokesman Martin Cej
wrote in an email, "which outweigh the misleading opinions being
promoted by critics who remain comfortable with the status quo."
Earlier this week Norfolk Southern unveiled a five-year
cost-cutting plan, which many analysts see as a bid to thwart
Canadian Pacific's takeover attempt.