CP Take Over Bid?

Just heard a takeover bid of CP is expected announced. Sigh...

http://www.thestar.com/Business/article/237227

Investor groups looking to buy railroads isn't really unexpected. CP is doing well and is a stable company with a secure future.

Now, if I got a dollar for every time I heard UP or NS is going to buy CP, I wouldn't have to work...

Rumors again.

** Sits on tatami mat, looking stoic and rolls eyes **

Well, this isn't exactly a rumour... seeing that CP has confirmed that they've been approached. CP is doing well, and being the smallest of the Big Six, the most likely place for and investor group to start.

Yes, the UP takeover talk is tiresome. But if CP decides to look for a white knight, it might well be another RR like UP.

It is nice that the RR sector are doing well enough to draw the attention of investors.

Sorry, my post wasn't clear as written.

Investors looking at railroads wasn't the tiresome rumor, since I heard/read about it before I saw this thread; it was the daily talk (rumor) of "...my buddy said he knows a guy that heard the ABC Railway is buying us out and the deal should be done by (insert date)..."

FWIW, I hope CP stays CP for a long while. Mr. Green's tenure, so far, has improved the Company and I'm eager to see his end game...

Well before I spread rumors or anything I would like to say what I'm about to say is purely HYPOTHETICAL.

Well, could this spark the next mega mergers? If CP were to be sold off and aquired by say UP or NS, then don't you think this would stir up the pot as to say and all the other RR's would start merging? I think Trains magazine had an issue a year or so ago about this, how if one RR was taken over, it would be like a chain reaction and start all the others.

Okay...

** Holds out his magic lock... you know, the ones with the nifty laser-engraved Milwaukee Road logos **

Before we go too overboard on the the idea of mega-mergers here, let me point out that I will give you guys a little leverage with this in discussing the topic, but please keep it related to the CP. You may use hypethetical scenerios in the discussion, but keep it CP centric.


Now, I thought there wouldn't be any mega-mergers, as the ICC wouldn't allow there to be just two big railroads as that would more or less be a monopoly on rail service. Granted, there are regionals and shortlines that would fill in the "niches," but still...

And would this CP merger scenerio be CP merging with one railroad, or be like Conrail and divided between two or more railroads?


Let the discussion continue...

BUT BE CIVIL.

** Twirls lock ** Or else.

If, then ... and ... if, then ... and ...

So far it's just been speculation on a single investment group (Brookfield - not Berkshire Hathaway) looking at buying out Canadian Pacific Railway's investors and taking the company private. There has been nothing to indicate that UP, NS, or any other railroad has any involvement.

That being said, Brookfield has a reputation of buying up companies and splitting them up to sell off the parts for a profit. What they might do with the CPR makes me shudder. CPR may look to another railroad to rescue them and prevent such a thing from happening. I hope none of these scenarios comes to pass.

For what it's worth, I hold a very small stake in CPR and, despite the sudden increase in share price, I'm not about to sell out just for the money.

These private equity groups seem to be the new way to make money.
The only thing about them is they want abnormal returns when they buy
a company or become a major shareholder. Since railroads aren't really barn burners in the stock market, the new owers will force the RR to
cut cost or sell assets to bolster the cash flow and/or stock price.
An inadvertant reaction from a CP merger or breakup could mean
more mergers among the other class 1's which in turn (remember recent
history) could reek havoc in the industry will more service meltdowns and
disruptions.

Ken V wrote:If, then ... and ... if, then ... and ...

So far it's just been speculation on a single investment group (Brookfield - not Berkshire Hathaway) looking at buying out Canadian Pacific Railway's investors and taking the company private. There has been nothing to indicate that UP, NS, or any other railroad has any involvement.

That being said, Brookfield has a reputation of buying up companies and splitting them up to sell off the parts for a profit. What they might do with the CPR makes me shudder. CPR may look to another railroad to rescue them and prevent such a thing from happening. I hope none of these scenarios comes to pass.

For what it's worth, I hold a very small stake in CPR and, despite the sudden increase in share price, I'm not about to sell out just for the money.

Oh I understand there hasn't been any involvement of other railroads, hense the reason why I said Hypothetically speaking. But it is possible it could create a mega merger.

Investors are trying to buy CP for a reason. The end result is to make a profit. If I were trying to buy CP to make a profit, it would be to pump and dump. I would see them selling CP as a whole, at least the Canadian operations because it'd be a hot political issue. Either way, it seems unlikely Brookfield is looking at getting into the RR business long term. My first guess is they will make the RR as efficient as possible (like CN), then shop it around. Shopping it around does not mean it has to be another RR... they could do an IPO and sell it to sharholders, like CP did when they broke CP Ltd into five companies. Though I imagine another RR would approach them.

Remember Blackstone and the C&NW? Even the casual observer knew C&NW would become UP property one way or another. The major RR's are all lined up like dominos, and all it takes is for one to fall and cause the expected chain reaction.

My opinion, this is the official beginning of the final round of consolidation. After the failed BNSF+CN, I think everyone is kinda waiting around for someone else tip over the first domino.

I heard that CP's acquisition of this new railroad could very well be the beginning of a buyout from Union Pacific. Apparently UP wanted better access into this area and this could be their way to do it. Stay Tuned!

Where did you hear that from? We're discussing the possible buyout of CP by a group of private investors, not aquisition by another railroad.

To quote Jimmy Fallon impersonationg Nicholas Cage...

"Who? What? Where?"


** Slowly waves hand in front of your face and does the Obi-Wan "Jedi Mind Trick" **

Union Pacific... this is not the railroad you wish to discuss.


Or, would you care to enlighten us further?

I just cannot see any mergers or breakups happening for many years. Look at the backlash from the CR breakup and all of the UP acquistions.