CSX Corp’s stock surges on report of CP Rail takeover interest

CSX Corp. jumped as much as 8 percent following the close of trading in New York, following a are convinced that Canadian Pacific Railway Ltd. approached the U.S. railroad about a takeover in January and was rebuffed.

Shares rose to US$25.60 in the latest trade at 6:22 p.m. in New York after climbing as high as US$26.60, up in the closing cost of US$24.64. CSX has declined 5 percent this year through Tuesday’s close compared with a 3.2 percent drop for that Standard & Poor’s 500 Index.

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Gary Sease, a spokesman for CSX, declined to comment on Tuesday’s report in the Wall Street Journal. Marty Cej, a spokesman for Canadian Pacific, declined to comment beyond confirming that Ceo Hunter Harrison said there would be benefits from a tie-up with CSX or another major carrier in the eastern U.S., Norfolk Southern Corp.

Canadian Pacific made three offers last year to buy Norfolk Southern and all were rejected as “grossly inadequate” and carrying regulatory risk. Harrison has stated a merger with an eastern U.S. railroad would produce a transcontinental service that might be more effective and reduce costs.

In 2014, Harrison held talks with CSX CEO Mike Ward, who batted down the concept of a merger.

Bloomberg.com