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Conrail-CSX deal derailed
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January 17, 1997: 8:07 p.m. ET
Shareholders reject provision of 9.3 billion bid while Norfolk waits
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NEW YORK (CNNfn) - Conrail Inc. shareholders rejected a key provision of the company's planned $9.3 billion merger with CSX Corp. at a Philadelphia meeting on Friday.
The decision should keep the rail merger from proceeding and is a victory for Norfolk Southern, which is pursuing its own $10.3 billion hostile takeover of Conrail.
At least 53 percent of the shareholders voted against a measure which would exempt Conrail from a state law requiring CSX to pay all cash for Conrail.
Conrail Chairman David LeVan conceded defeat for the measure but gave notice of more battling.
"The Conrail board has determined that a sale to Norfolk Southern is not in the best interests of Conrail, and the Conrail board will not agree to a sale to Norfolk Southern."
While LeVan said that he would strive to "get out and sell the value of this transaction," Transportation Analyst Doug Rockel of Furman Selz saw the possibility of compromise. (97K WAV) or (97K AIFF)
Levan said he would schedule a new shareholder vote but did not specify a date.
Conrail has continually spurned Norfolk Southern, whose hostile bid offers more money than CSX. Conrail counters that CSX's offer would provide more benefits to the company. 
-- Randy Schultz
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