NS and Pan Am questions -- buyouts, partnerships, etc

Obviously there are a lot of people here with good, first hand and inside information about the railroad industry and Pan Am Railways. As an outsider who only knows what he reads on the 'net and in the media, could you learned folks help me with the following questions:
1. Would an NS purchase of PAR require NS shareholder approval?
2. What strategic bussiness purposes would justify an NS purchase of Pan Am?
3. Anyone care to guess what PAR's asking price would be? Would they take cash, stock, both? What are the regulatory requirements for such a transaction?
4. Could it actually be that NS simply is negotiating for trackage rights for intermodal? As far as I know, the only daily operational interest that NS has on PAR is the intermodal ramp at Ayer, where they actually market the service and set the schedules and rates. Pan Am subsidiary GMX (Guilford Motor Express) operates the facility.
5. Considering that it's probable that CSX interchanges a nearly equal amount of traffic with PAR as NS does, what say will CSX have in terms of competitive issues regarding a sale of all or part of PAR to NS?
Thank you.

this will probbably get locked, we're not suppossed to talk about stuff it we arent sure itll happen. hahha, its true, one got locked about a month ago.



\i'd love for ns to buyout panam. itd be good to have a company interested in growing business, not downsizing.

(1) Isn't it usually the company being bought whose board has to approve the deal?
(2) Access to New England and its 12 million people. Intermodal, Autos, transloading, Coal, Ethanol, Cargill, access to the NECR, PW, PVRR. Not to mention getting a bigger share of the Maine Paper business.
(3) I believe they wanted $400 million or something for the whole thing. It will be a lot less for only part of the B&M. Probably considered a "minor" transaction by the STB.
(4) This is definately bigger than just Intermodal.
(5) As long as CSXT retains its access to Maine, they don't have much of a beef. If anything, the NS getting the western end of the B&M will provide for more, not less competition.

I know

Mick, trackage rights are a pretty common way of class ones getting access to certain markets. The UP got to LA over the ATSF and to Seattle via the BN. The CP gets to Chicago via CSXT and NS. KCS gets to Mexico via the UP. The BNSF gets from Denver to Oakland and and gets up the I-5 corridor, including Tehachapi over the UP. I could go on and on, but the bottom line is that you take what you can get.

Looks like more rumors to me.
Noel Weaver

Hmmmmm
if I can sell one of my web sites for 'myspace' money, i could swing that kind of dough and buy B&M you don't need very many million to live a very comfortable life if you don't go nuts My opinion on the matter is that there is HUGE potential for more rail customers in NE. I bet PAR could triple or more, its business, if it tried to. If they hired some salesman to actively pursue all these abandoned sidings all over the region.

Aww i just realized I added absolutely nothing to this thread

tom18287 wrote:this will probbably get locked, we're not suppossed to talk about stuff it we arent sure itll happen. hahha, its true, one got locked about a month ago.

If you have an issue with how this forum is moderated, feel free to take it up with me in private.

I have no intention of locking this thread at this point in time; in fact, I created this thread because the original post by cpf354 was in the geometry train thread, and I felt that it was better suited to its own thread, so I moved it over to this one.

tom18287 wrote:\i'd love for ns to buyout panam. itd be good to have a company interested in growing business, not downsizing.

Agreed. I've been saying that all along. There are many, many companies in Maine that have expressed an interest in rail freight, but they haven't pursued it because either they weren't able to get anywhere with Pan Am, or they were burned by GRS too many times in the past.

If PAR and NS can work together to provide overall better rail service to New England, that's good news for everybody.

I guess tom18287 would rather mouth off than actually write me with an issue he is having with how this site is moderated.

So let's see... cpf354 asked a series of questions.

1. Would an NS purchase of PAR require NS shareholder approval?

Good question. I don't know. But why are you convinced NS wants to buy PAR?

2. What strategic bussiness purposes would justify an NS purchase of Pan Am?

You tell me, you brought it up, not NS.

3. Anyone care to guess what PAR's asking price would be? Would they take cash, stock, both? What are the regulatory requirements for such a transaction?

Who says PAR is for sale? PAR is a privately held company that does not release any financial figures, so your guess is as good as mine. Cash, stocks, gold-pressed latinum, who knows. I don't sit on the Board of Directors, you'll have to ask them.

4. Could it actually be that NS simply is negotiating for trackage rights for intermodal? As far as I know, the only daily operational interest that NS has on PAR is the intermodal ramp at Ayer, where they actually market the service and set the schedules and rates. Pan Am subsidiary GMX (Guilford Motor Express) operates the facility.

NS already has trackage rights and operating agreements. Not sure what you're asking here.

5. Considering that it's probable that CSX interchanges a nearly equal amount of traffic with PAR as NS does, what say will CSX have in terms of competitive issues regarding a sale of all or part of PAR to NS?

Why would CSX care about something that's not happening? Or might happen? NS might do this. NS might do that. PAR might do something else. Sounds hypothetical and academic to me.

-otto-

1. Would an NS purchase of PAR require NS shareholder approval?

Otto - Good question. I don't know. But why are you convinced NS wants to buy PAR?


This is common knowledge if you follow railroading in New England. Look at the CSX Route Map and then look at NS. NS can't get into New England and CSX can under current route networks.


2. What strategic business purposes would justify an NS purchase of Pan Am?

Otto - You tell me, you brought it up, not NS.


See above, namely access to the population of New England on NS rails, which they currently don't have.


3. Anyone care to guess what PAR's asking price would be? Would they take cash, stock, both? What are the regulatory requirements for such a transaction?

Otto - Who says PAR is for sale? PAR is a privately held company that does not release any financial figures, so your guess is as good as mine. Cash, stocks, gold-pressed platinum, who knows. I don't sit on the Board of Directors; you'll have to ask them.


People with knowledge have confirmed that several series of active negotiations have taken place in the past about the sale of all or, more likely, the B&M portion of Guilford to NS. The word has been that the asking price is always too high...


4. Could it actually be that NS simply is negotiating for trackage rights for intermodal? As far as I know, the only daily operational interest that NS has on PAR is the intermodal ramp at Ayer, where they actually market the service and set the schedules and rates. Pan Am subsidiary GMX (Guilford Motor Express) operates the facility.

Otto - NS already has trackage rights and operating agreements. Not sure what you're asking here.


Incorrect, NS doesn't have trackage rights on GRS, rather haulage rights. Trackage rights exist on CP to the interchange with GRS in the Mohawk/Mechanicville area.


5. Considering that it's probable that CSX interchanges a nearly equal amount of traffic with PAR as NS does, what say will CSX have in terms of competitive issues regarding a sale of all or part of PAR to NS?

Otto - Why would CSX care about something that's not happening? Or might happen? NS might do this. NS might do that. PAR might do something else. Sounds hypothetical and academic to me.


See #1 again. CSX would very much care if NS bought the B&M. NS's ability to provide better customer service, better rates, etc. would suck a large volume of New England business away from CSX that they currently have, simply due to Guilford's lousy track record for operating a railroad and extremely poor customer service.

Seems to me these are good questions and you didn't need to belittle them & the asker , rather, try doing your homework first.

Brooks

While I do think that NS would have a great interest in PAR, I don't think it is happening now. I know that PAR has been doing some odd things in the last few months, but I think that people might be mistaking that with a possible sale when it is just normal periodical PAR oddness.

Just look at when NARCOA asked PAR to do a motorcar run and they said No because motorcars use gasoline. When stated that they could get diesel and propane only cars PAR said no cause it was the same as gas. Now recently they stated they would allow all motorcars, but $20M in insurance would be needed, compared to the $5M NARCOA has and uses on just about every other railroad with no problems. PAR just likes to do things that leave questions and vague reasonings.....because they can.

You're right, I was lumping haulage rights and trackage rights into the same deal. They're not. But since PAR isn't for sale (as far as we know), it's kinda all speculation. NS did announce some major investments in the ex-B&M main, if I recall, to improve transit time, but I think that was a partnership agreement, not a buyout. NS gains nothing from taking on PAR- the railroading world's version of Mystery Meat, and Mellon is not about to expose his organization by opening up his books to NS' accountants for inspection. We're speculating on a rumored purchase- show me the STB filings and we'll talk. :-) I think NS likes things just the way they are.

-otto-

Guys, first of all as I stated previously, the NS/PAR talks are not rumors. I have spoken on numerous occasions over the past month with people DIRECTLY involved with the negotiations from both railroads. I'm not talking about trainmen or signal maintainers, but the guys wearing the suits and ties, so you can stop theorizing that it's just rumor. Is it guaranteed to happen, absolutely not, but it's looking better and better. Also, it's not a sale, but more of a serious partnership/joint operation on the West end.

Also, it truly amazes me that anyone would question why the NS would want PAR! You ever see how much business CSXT runs over the B&A? Well PAR has the better route, more industrial development sites, two coal plants, a flour mill and half dozen paper plants, not to mention access to the 5 million person Boston metropolitan area. To the contrary, they'd have to be crazy NOT to want PAR!!

But since PAR isn't for sale (as far as we know), it's kinda all speculation.

Actually, GRS/PAR has been up for sale for years (not rumor - fact)... but at such ridiculous terms, the CP, CSX and NS have up till now just sniffed and not bitten.

Maybe there's too much conventional thinking reflected in the track acquisition discussion above. When I was at Logan Airport a couple weeks back waiting for my Delta flight, I was told that NS really wants PAR's 727s to use for time sensitive freight delivery in the I-95 corridor. Something about getting fresh off the dock Maine lobsters to Roanoke on the same day.