ROANOKE TIMES 
                      Copyright (c) 1996, Roanoke Times

DATE: Friday, December 6, 1996               TAG: 9612060038
SECTION: NATIONAL/INTERNATIONAL   PAGE: A-1  EDITION: METRO 
DATELINE: PHILADELPHIA
SOURCE: Associated Press

CONRAIL, CSX SUE NS FOR INTERFERENCE IT JUST WANTS TO SCUTTLE MERGER, THEY CHARGE

Conrail and CSX Corp. sued Norfolk Southern Corp. Thursday, accusing the railroad of interfering in their agreement to merge.

Norfolk Southern has been leading an energetic campaign against the Conrail-CSX agreement, bidding $110 a share for Conrail stock and arguing in court and in public statements that its offer is superior to CSX's.

In their federal lawsuit, Conrail and CSX say Norfolk Southern never intended to acquire Conrail but wanted to disrupt and cripple a strategic alliance between CSX and Conrail.

The railroads say Norfolk Southern's actions were malicious and asked for punitive damages and a jury trial.

Rob Chapman, a spokesman for Norfolk Southern, said late Thursday afternoon that the company had just learned about the lawsuit and would withhold comment until today.

``Norfolk Southern has flooded the marketplace with false and misleading information concerning both the CSX-Conrail merger and its conditional hostile tender offer. Norfolk should be held accountable for its actions,'' Conrail and CSX said in a joint statement issued in Philadelphia and Richmond.

Thomas Hoppin, a spokesman for Richmond-based CSX, said the railroad would have no comment on the case beyond the joint statement.

Conrail announced Oct. 15 that it would merge with CSX in a cash-and-stock deal that would total about $8.5 billion today. A week later, Norfolk Southern offered to buy all Conrail stock for $10 billion in cash.

At stake is control of a railroad that would make either suitor the No. 3 freight line in the United States with command over lines in the heavily populated eastern half of the country.

Thursday was the deadline for shareholders to participate in a critical upcoming vote in the merger battle. Only shareholders of record as of Thursday will be eligible to vote Dec. 23, when they will be asked to approve lifting protection of a Pennsylvania law that blocks CSX from buying more than 20 percent of Conrail stock.

CSX already holds 19.9 percent and plans to buy 20 percent more for cash if it wins shareholder approval.

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