Pan Am Railways, For Sale/Acquisition/Merger?

[CN9634]

Fortress was a bidder.

[gokeefe]

I'm very curious if Pan Am was ... and/or CSX/NS.

[newpylong]

Not a shot CSX or NS was.

[F-line to Dudley via Park]

I'm very curious if Pan Am was ... and/or CSX/NS.

I doubt PAR the incorporated company and any sub-companies under its umbrella have anywhere close to the cumulative cash on-hand to have swallowed P&W whole. That would've taken Mellon dipping into his personal fortune via other holdings to come up with the funds to hold off the likes of Fortress, G&W, and others of that ilk. Something he certainly has more than enough resources to do, but at his age and with no railroader heirs in the family it's extremely improbable he'd have any interest in swinging for the fences like he did 3 decades ago when Guilford bought the MEC, B&M, and D&H in a 4-year acquisition blitz.

[bostontrainguy]

Late news that St. John is making big plans to expand its container facilities and is seeking better rail service. Now would NS consider acquiring all of Pan Am? What would it take? How much business would make it worthwhile?

[F-line to Dudley via Park]

Expanded St. John still isn't within orders-of-magnitude large enough to stimulate any NS interest. The step-downs in freight traffic east of Ayer and north of Portland are still very steep despite prospects of more Irving action in the far north. Worcester County is still the easternmost extent where the Class I's see maximal profit margins. Projected Ayer growth is still going to outstrip the tippy-top growth that an expanded St. John port could ever throw down the coast, so nothing changes about the Class I calculus. The most we're talking is flushing a very sad-looking D1 with some very modest recovery via Irving. It breathes new life into 'Keag, which is unequivocally a very good thing. But breathing new life into 'Keag is still microscopic potatoes compared to Ayer, Portland, and Waterville IM and future traffic prospects coming up from the south, not north.

[newpylong]

Late news that St. John is making big plans to expand its container facilities and is seeking better rail service. Now would NS consider acquiring all of Pan Am? What would it take? How much business would make it worthwhile?

Never. That's a lot of mileage (and terrible physical plant) for one terminal.

[BostonUrbEx]

If anything, I think St John panning out would mean NBSR being more interested in the old MEC. NBSR is probably the most qualified and likely railroad around to get Portland to Mattawamkeag back in shape and running well.

[CN9634]

Expanded St. John still isn't within orders-of-magnitude large enough to stimulate any NS interest. The step-downs in freight traffic east of Ayer and north of Portland are still very steep despite prospects of more Irving action in the far north. Worcester County is still the easternmost extent where the Class I's see maximal profit margins. Projected Ayer growth is still going to outstrip the tippy-top growth that an expanded St. John port could ever throw down the coast, so nothing changes about the Class I calculus. The most we're talking is flushing a very sad-looking D1 with some very modest recovery via Irving. It breathes new life into 'Keag, which is unequivocally a very good thing. But breathing new life into 'Keag is still microscopic potatoes compared to Ayer, Portland, and Waterville IM and future traffic prospects coming up from the south, not north.

I'm doubtful on a full scale NS takeover but the Saint John expansion is leaps and bounds beyond anything close to Portland. As a comparison, Portland right now can handle one 1200 TEU ship at the berth and could at most handle two of those a week if they sparked some magical traffic.

http://www.joc.com/port-news/internatio ... 60922.html" onclick="window.open(this.href);return false;

[F-line to Dudley via Park]

If anything, I think St John panning out would mean NBSR being more interested in the old MEC. NBSR is probably the most qualified and likely railroad around to get Portland to Mattawamkeag back in shape and running well.

Fortress too. They bid on P&W, so you know they're going to be in the mix for a PAR bid. They've got the cash, Irving's got the cash, G&W's got the cash (though a much harder antritust case now that probably makes them non-preferred). And undoubtedly some out-of-region dark horse we never expected has the cash and the burning desire to make a play for it. All depends on who can fashion the best deals to hook themselves into first- or second-degree Class I traffic. PAR's got the direct hookup to NS and CSX in Worcester County, so that's a known-known big advantage. Value-for-bid $$$ amongst the acquisition players will ultimately come down to who's got the best chance to worm their way into CN or CP action, directly or through a friendly intermediary.

Irving certainly gets in much stronger position with St. John expansion, but be-all/end-all is still about who can best leverage synergies with multiples of the Big 4 Class I's surrounding the Northern New England perimeter.

[newpylong]

I wouldn't be so sure anyone is chomping at the bit to take over that trackage.

[johnpbarlow]

Pan Am has weighed in at the STB with a filing of support of the GWI acquisition of P&W given that Springfield Terminal and GWI have negotiated that ST/PAR's interchange with CSX at Barber's will be preserved:

Genesee & Wyoming Inc. ("GWl") and the Springfield Terminal Railway Company
("ST") have been engaged in discussions regarding the potential impacts of GWI' s acquisition of
the Providence and Worcester Railroad Company ("P&W'') in the above-referenced proceeding.
In order to resolve ST's concerns with such potential impacts, GWI has agreed that it will not
take or fail to take any actions that would adversely impact the ability of ST to interchange
traffic with CSX Transportation, Inc. at Barbers Station in Worcester, Massachusetts in violation
of: (a) the Providence and Worcester Railroad Company Grant of Trackage Rights, as amended,
dated June 30, 1989; or (b) applicable law. In addition, GWI has agreed to have any exemption
authority or Board approval of this transaction conditioned upon GWI's commitment reflected in
this letter. GWi's recognition of this condition is memorialized by the signature below.

I am puzzled about the grammatical nuance of the "...fail to take..." part of the sentence "...GWI has agreed that it will not
take or fail to take any actions that would adversely impact the ability of ST to interchange traffic with CSX Transportation..." but I think ST is saying CSX interchange will be business as usual if G&W takes over P&W.

Does this support letter also imply that PAS/PAR and NECR/GWI are reaching a meeting of the minds wrt Conn River trackage rights fees and Ts & Cs?

https://www.stb.gov/filings/all.nsf/ba7 ... 241736.pdf

[Cowford]

"take... any actions..." should be pretty obvious.

"fail to take any actions..." would cover such things as track maintenance, e.g., failure to maintain the track to the point that would trigger cargo restrictions or condemnation.

[johnpbarlow]

That makes sense! I don't know why but I just couldn't parse that sentence the first ten times I read it. Thanks!

[YamaOfParadise]

Basically, PAR/ST doesn't want them to do something PAR/ST would do themselves.