UPDATE 2-CP Rail mulls litigation over opposition to Norfolk Southern deal

(Adds comment from CP spokesman, line on CP petitioning STB for
order on voting trust)
By Allison Lampert and Nick Carey
MONTREAL/CHICAGO, March 2 (Reuters) - Canadian Pacific
Railway Ltd CP.TO said on Wednesday it is looking at all legal
options in response to what it described as concerted efforts by
certain U.S. railroads to block its proposed merger with Norfolk
Southern Corp NSC.N .
"It is unfortunate that CP must consider the use of
litigation to ensure a level playing field and protect its
rights," CP, Canada's second-largest railroad, said in a
statement.
CP's $28 billion plan to buy Norfolk Southern (NYSE:NSC) has garnered
support from more than 80 shippers but is being
opposed by Norfolk Southern and a number of industry groups and
other rail customers.
Some U.S. railroads said on Wednesday they were not
participating in any anti-competitive activities.
"CSX CSX.O has not been part of, nor is it aware of, any
anti-competitive activities related to mergers, or otherwise, in
the railroad industry," spokeswoman Melanie Cost said by email.
A spokesman for BNSF Railway Co BNISF.UL declined to
comment.
CP has previously raised concerns that U.S. railroads were
working collectively to oppose its proposed merger with Norfolk
Southern. In January, CP said in a statement that it asked the
U.S. Department of Justice to "review" the actions of certain
railroads "who have stated publicly that they are organizing a
collective campaign" to block industry mergers.
A CP spokesman said on Wednesday that the railroad has not
been in contact with the Department of Justice since sending
that request.
The proposed merger, announced in November, would come under
regulatory scrutiny from the Surface Transportation Board over
its impact on the U.S. rail market, in particular the
possibility it could spark competition-crushing rival deals,
according to former regulators and analysts.
It would be the first deal reviewed by the STB since the
U.S. rail regulator rewrote merger rules in 2001.
Canadian Pacific said on Wednesday that it has asked the STB
for an order that would confirm the viability of a voting trust,
the complex deal structure that it intends to use in its
proposed takeover of Norfolk Southern. In February, CP said it
would seek an STB order on the rarely used structure, which
would allow Canadian Pacific and Norfolk Southern to remain
independent until their merger wins regulatory approval, but yet
allows the U.S. railroad's shareholders to be paid before the
deal closes.
On Tuesday, the Wall Street Journal reported that Canadian
Pacific approached CSX in January about a takeover, but the
railroad rebuffed CP's advances.