CP files definitive proxy statement for NS shareholder resolution

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Written by: Carolina Worrell, Managing Editor
Canadian Pacific on March 29, 2016 filed its definitive proxy statement for its Norfolk Southern Corp. (NS) shareholder resolution asking NS’ Board of Directors to engage in good faith discussions with CP regarding a business combination. CP also filed a letter that will be sent to all NS shareholders about the opportunity to create significant value for NS shareholders.

In filing its own definitive proxy statement on March 28, NS stated: "[The] Shareholder Proposal from Canadian Pacific is Unnecessary Because Norfolk Southern Would Have Discussions with CP if it Obtains a Declaratory Order and States a Willingness to Meaningfully Increase its Offer."

"CP has consistently stated that we are open to discussing all terms of a potential deal, including price, but we can't negotiate with ourselves," said CP CEO, E. Hunter Harrison. "Given we have also asked the Surface Transportation Board for a declaratory order on the voting trust model we were pleased to hear that Norfolk Southern may now be willing to engage in direct face-to-face discussions."

CP says its proposed business combination with NS would create a true end-to-end transcontinental railroad that would enhance competition, benefit the public and drive economic growth. CP adds that it has “demonstrated from the beginning that it is flexible on price, having improved its offer twice already, and shown flexibility on the structure of a potential combination, offering a voting trust structure as the quickest way for NS shareholders to receive consideration for their shares. CP has consistently said, however, that the voting trust is not a condition to its offer.”

NS shareholders have been telling CP from the beginning that their own board should, at the very least, talk to CP about a potential combination. CP's shareholder resolution to NS asks shareholders to formally vote in favor of what they have been saying to CP anecdotally for months; it is a vote for a discussion between the two companies, not on the proposal itself. The shareholder resolution will be voted on at the NS annual meeting May 12 in Williamsburg, Virginia.

"The NS board has refused to meet with us in the past, which ultimately led to our shareholder resolution," said Harrison. "While we remain open to meeting with them anytime and anywhere, we are putting the question to the shareholders of NS so they can finally be heard. We continue to see tremendous opportunity and enormous potential in the proposed business combination."

CP strongly believes that a combined railroad would offer unparalleled customer service and competitive rates that will support the success of the shippers and industries it serves, create far more shareholder value than NS' strategic plan and satisfy the U.S. Surface Transportation Board and other regulators.

The definitive proxy statement and related proxy materials, including CP's letters to shareholders and a "universal" GREEN proxy or voting instruction form, will be mailed to shareholders of NS and are also available via EDGAR at http://www.SEC.gov.

For more information on CP's proposal, visit www.cpconsolidation.com.

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