Press Release Source: Canadian Pacific Railway
Canadian Pacific completes acquisition of DM&E Railroad
Thursday October 4, 3:19 pm ET
CALGARY, Oct. 4 /CNW/ - Canadian Pacific Railway Limited (TSX/NYSE: CP)
announced today that it has completed the transaction to acquire Dakota,
Minnesota & Eastern Railroad Corporation and its subsidiaries (DM&E).
The agreement was previously announced on September 4, 2007.
The transaction is subject to review and approval by the U.S. Surface
Transportation Board (STB), pending which the shares of DM&E have been
placed into an independent voting trust. The voting trust is required by
US law so that CP does not exercise control over DM&E prior to approval
of the transaction by the STB.
CP announced that Mr. Richard Hamlin has been appointed as the trustee
during the review period. Mr. Hamlin is a private consultant with over
30 years of experience serving major transportation companies. He is a
retired National Director for the Transportation Practice of KPMG LLP
and has served as past Chairman of the American Institute of CPA's
(AICPA) Transportation Committee and of its Railroad and Trucking Task
Forces. He has also served on the executive committee of numerous
councils of the American Trucking Associations (ATA).
CP has developed a solid transition plan which focuses on safety and
customer service that it will, subject to any requirements imposed by
the STB, implement upon receipt of STB approval of the acquisition. The
DM&E will become part of CP's overall U.S. network upon receipt of STB
approval. The STB review process is expected to take less than a year.
Canadian Pacific to acquire DM&E (Updated 10/16/07)
- trainjunkie47
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- EJ&ESDM809
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Once CP gets the DM&E/IC&E, they probably won't repaint the engines in a big hurry. Just look at all the old SOO engines they still own that are in patched MILW paint. Funny how some of DM&Es ex-CP SD40-2s are still in CP paint, and now they will go back to CP. This could be a potentially good situation as IC&E and DM&E engines could roam the CP system. I don't see anything that wouldn't allow that. Unlike CN, CP only seems to repaint engines when they are in for major work or a rebuild.
Robby Gragg - Proud fan of the EJ&E Railway
- cnw8835
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DM&E chief says railroad will stay independent
DM&E chief says railroad will stay independent
SIOUX FALLS, S.D. - Canadian Pacific Railway has completed the purchase of the Dakota, Minnesota & Eastern Railroad, but still must await approval of the $2.5 billion transaction by the federal Surface Transportation Board. It could take as long as eight months to make a decision, DM&E Chief Executive Officer Kevin Schieffer told the Sioux Falls Argus Leader. DM&E stock has gone into a trust until the STB approves the acquisition and the DM&E and CPR will operate independently in the interim. If the STB approves the deal, control of the DM&E stock goes to Canadian Pacific. Terms of the CPR acquisition include a $1.5 billion payout up front, with as much as an additional $1 billion over time based on rail traffic.
In a somewhat surprising development, Schieffer said that ultimately the DM&E will maintain its identity and probably its Sioux Falls headquarters, and will operate as a CPR subsidiary. He also says he intends to stay with the railroad. Most observers assumed that the railroad would be fully integrated into CPR.
Wall Street railroad analyst Anthony Hatch told the Argus Leader he expects the STB will find no major problems with the merger, since it will give shippers across South Dakota access to a second Class I railroad in CPR. "I can't really see what could trip this up. This is a deal that will be passed eventually. It's just a question of when," he told the Argus Leader.
Hatch says it is unclear whether the CPR plans to follow through with the goal to extend DM&E's line to Wyoming's Powder River Basin. But he says if the CPR decides to do so, it might have recourse to federal financing that was denied the DM&E. DM&E was turned down early this year for a $2.4 billion federal loan to help build the estimated $6 billion Powder River Basin project. The Federal Railroad Administration, which oversees the loan program, cited the DM&E's existing debt burden as the reason the railroad's loan application was rejected. Hatch said that if CPR decided to pursue a federal loan they could do so. "They could repay it," he said of CPR.
SIOUX FALLS, S.D. - Canadian Pacific Railway has completed the purchase of the Dakota, Minnesota & Eastern Railroad, but still must await approval of the $2.5 billion transaction by the federal Surface Transportation Board. It could take as long as eight months to make a decision, DM&E Chief Executive Officer Kevin Schieffer told the Sioux Falls Argus Leader. DM&E stock has gone into a trust until the STB approves the acquisition and the DM&E and CPR will operate independently in the interim. If the STB approves the deal, control of the DM&E stock goes to Canadian Pacific. Terms of the CPR acquisition include a $1.5 billion payout up front, with as much as an additional $1 billion over time based on rail traffic.
In a somewhat surprising development, Schieffer said that ultimately the DM&E will maintain its identity and probably its Sioux Falls headquarters, and will operate as a CPR subsidiary. He also says he intends to stay with the railroad. Most observers assumed that the railroad would be fully integrated into CPR.
Wall Street railroad analyst Anthony Hatch told the Argus Leader he expects the STB will find no major problems with the merger, since it will give shippers across South Dakota access to a second Class I railroad in CPR. "I can't really see what could trip this up. This is a deal that will be passed eventually. It's just a question of when," he told the Argus Leader.
Hatch says it is unclear whether the CPR plans to follow through with the goal to extend DM&E's line to Wyoming's Powder River Basin. But he says if the CPR decides to do so, it might have recourse to federal financing that was denied the DM&E. DM&E was turned down early this year for a $2.4 billion federal loan to help build the estimated $6 billion Powder River Basin project. The Federal Railroad Administration, which oversees the loan program, cited the DM&E's existing debt burden as the reason the railroad's loan application was rejected. Hatch said that if CPR decided to pursue a federal loan they could do so. "They could repay it," he said of CPR.
- EJ&ESDM809
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I've heard DM&E will be operated as a subsidiary of CP and the current management of DM&E will remain invloved with the CP/DM&E. This doesn't mean that DM&E and IC&E engines will remain in those paint jobs. SOO is still a subsidiary of CP, and that is supposedly the same way DM&E will be operated.
Robby Gragg - Proud fan of the EJ&E Railway