ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, February 1, 1997 TAG: 9702030037
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Bloomberg Business News
Conrail Inc., Norfolk Southern Corp. and CSX Corp. executives ended a meeting Friday on the months-long takeover battle for Conrail without indicating if they made any progress in breaking a stalemate.
``No further details on this meeting or timing of future meetings will be announced,'' Norfolk Southern Chief Executive David Goode and his counterparts John Snow of CSX and Conrail's David LeVan said in a tersely worded statement.
The meeting, the first of all three principals in the contest, marked a temporary cease-fire in the fight for Conrail, the Philadelphia-based railroad prized for its dominance of rail freight traffic in the northeastern United States.
Conrail has steadfastly refused to negotiate with Norfolk Southern, even though Norfolk Southern's $10.32billion all-cash hostile offer is more than CSX's $9.67billion cash-and-stock bid.
Peter Gleason, a senior analyst at Institutional Shareholder Services in Bethesda, Md., which advises Conrail's biggest shareholders, said he's doubtful that the three sides reached any sort of agreement. ``I don't think it's going to get done in one meeting,'' Gleason said.
Goode warned earlier this week that Norfolk Southern would try to replace Conrail's board if attempts to reach a mutually acceptable solution fail. Norfolk Southern has vowed to block any offer that doesn't guarantee Conrail shareholders $115 a share, the value of the Norfolk Southern bid.
Goode and other company officials have hinted in recent days that Norfolk Southern might not be the one to pay the $115, however, prompting some shareholders to speculate that CSX and Norfolk Southern might team up to buy Conrail and split its assets between them.
Jim Higgins, an analyst for Donaldson Lufkin & Jenrette, said CSX and Norfolk Southern fear that the federal Surface Transportation Board, which must ultimately approve an acquisition of Conrail, would split the railroad in a way that the railroads wouldn't like.
``I think the two sides realize they really would rather work this out themselves,'' Higgins said.
Earlier Friday, the Surface Transportation Board said it will vote on whether to approve an acquisition of Conrail no later than 365 days after the first merger application is filed with the agency.
CSX and Conrail have said they will file an application by March 1, while Norfolk Southern intends to file no later than May 1.
The agency also said it will combine both applications and hold ``a single proceeding for determining the control or merger of Conrail.''
LENGTH: Medium: 54 linesby CNB