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Canadian Pacific rules out hostile bid, hopes to get CSX on board

CANADIAN Pacific Railway (CP) CEO Hunter Harrison said he faces an uphill battle to convince CSX Corp - not just Norfolk Southern - of the merits of a CP takeover, reports Bloomberg.

"Neither one of them think they fit well with us. So I've got a selling job to do if we're going to make this successful," said Mr Harrison.

He ruled out a hostile bid, a subject of much speculation. "When you go hostile, it doesn't create the type of esprit de corps to get things accomplished," he said.

Mr Harrison has been pursuing an acquisition that would create a coast-to-coast railway, eliminating rail-car exchanges between carriers.

Mr Harrison has made three offers to buy Norfolk Southern, including one in December that valued the US company at US$27 billion. All were rejected.

He conceded that CP should have used a "little softer" approach to win over Norfolk Southern CEO Jim Squires and his team, said Harrison at his home in Ridgefield, Connecticut.

"We made an offer with Norfolk Southern with a letter, a pretty extensive offer, a four- or five-page letter," he said. "Maybe we should gone in and shaken hands, sat down and just talked first. Maybe their impression was that we were trying to back them into a corner. It was not our intent."

The Calgary-based railway is proposing a resolution to Norfolk Southern shareholders requesting that the carrier's board engage in "good faith" discussions. Should that resolution be rejected, CP would end efforts to merge and focus on its own network.