CPR to buy Dakota, Minnesota & Eastern Railroad Corp

For those of you that haven't heard the news yet, it looks like CP is in the process of a major aquisition and I've posted what I know so far here;
http://www.tracksideproductions.com/for ... wtopic=371
I'm not sure yet exactly what this means for CP, but I figure it's a major investment and will really help the company position it's self for the future. As a CP fan, I'm keeping my fingers crossed that things go well as it will help insure the future of CP as a major class 1 railroad.
Thoughts?

James.

Here is the link to the announcement from CP's site:

http://www8.cpr.ca/cms/English/Investor ... efault.htm

It was the only way they could get a bunch of their old SD40-2's back

Ironic in that they sold off the lines that comprised the IC&E... now they own them again, though this is likely a move to secure Ethanol / Corn traffic and Coal from the PRB. Oh, and make them a little bigger and a little harder to take over...

They beat CN to the punch here. Very interesting!

Not ironic, they always maintained a 49% interest in the I&M RailLink and later IC&E. I don't know if they will got what they paid for but from a strategic standpoint, this is a great deal for the CP. About time they get off their butts and buy somebody out.

The map certainly gives CP more strategic routes in the Midwest... Kansas City and across South Dakota, then its a hop, skip and a jump to Gillette, Wyoming... certainly puts them in a good position if they decided they wanted to push to build that new line into the Powder River Basin.

-otto-

THis is -so- funny, CP/SOO will get back some units they let go on lease or sold to IMRL and DME in this! Including 6 CP SD40-2 units recently traded to NREX, Rebuilt CP SD40s, Ex MILW SD40-2, ex SOO GP9s etc etc etc

"Power Desk: Didn't we get rid of these?"

One thing is for certain...... CP will keep all of the 16 cylinder 645s, they are better then the ones that they already have! CP is short of 4 axles anyway.

Otto Vondrak wrote:The map certainly gives CP more strategic routes in the Midwest... Kansas City and across South Dakota, then its a hop, skip and a jump to Gillette, Wyoming... certainly puts them in a good position if they decided they wanted to push to build that new line into the Powder River Basin.

-otto-

All depends upon where they will get the $6 billion in funding. It was not a slam dunk for DM&E, who announced the PRB project almost 10 years ago, and they still dont have the cash in hand. CP will be getting a lot of debt along with this line, DME just got another loan from FRA for $40 million in January. Without looking in my notes, loans are outstanding for $233M, $110M, and $90M from over the years. Part of that money was to pay back whoever fronted DME the cash to propose and spend many many months before the STB trying to get this project off the ground, and pay back the loans at extreme rates to purchase the assets of the IMRL from Washington Group.

I have been saying right from the begining, if this is such a hot project, show me the money. Yep, just as I thought.

Why doesnt CP ever do a train from NJ to Vancouver? They should run some NJ to KC trains with this new acquisition!

HoggerKen- Good point, but CP's board would not have allowed the purchase if they thought the debt was going to offset the value of the acquisition. DME might have been turned down for a PRB loan, but I bet CP has much more financial credit than a small American regional.

-otto-

Two words: deep pockets

Well it looks like these fellahs gotta shutdown there website, http://www.dmetraintruth.com/

Otto Vondrak wrote:HoggerKen- Good point, but CP's board would not have allowed the purchase if they thought the debt was going to offset the value of the acquisition. DME might have been turned down for a PRB loan, but I bet CP has much more financial credit than a small American regional.

-otto-

CP indeed does have far better credit and debt/equity than stand alone DME. What I was getting at was, in the last ten years, the public has heard forecasts about the traffic this project will bring. No one can say for sure since it has changed so much. If he was talking to the Citizens of Rochester, you heard one number. If you lived in Mankato heard another. No consistancy. And no, I am not talking about the opponents to this project. I am talking about information that came from the carrier on different occasions.

It got to the point over the years, you really had no idea what to believe. Goodness knows what they told the FRA in their loan application, or what they said to CP. If their filings to the Surface Transportation Board is any indication, CP is in for some surprises.

CN9634 wrote:Well it looks like these fellahs gotta shutdown there website, http://www.dmetraintruth.com/

Don't bet the farm on that.