The Interstae Commerce Commission extended its ban on further Southern Pacific Railroad Purchases of Seaboard Coast line stock from today to March 16.
Continued purchases could affect decisions by Seaboard's management and "seriously dilute" its control of the railroad, the ICC said in announcing the extension yesterday.
Seaboard and Chessie System had announced a merger plan in mid-November to create a 27,600-mile system across the Southeast and Middle West Last spring, Seaboard had broken off merger discussions with Southern Pacific, but Sopac had continued buying Seaboard stock. Its holdings were 1.4 million shares, or 9.6 percent of Seaboard's outstanding issues, as of last month.
The ban had been issued Aug. 9 in response to Seaboard's July 21 complaint that Southern Pacific was attempting a takeover without seeking the necessary ICC approval. Sopac had replied that it wasn't ready yet to apply for takeover approval.
In extending the ban, the ICC also said further purchases by Southern might distort the market price of Seaboard stock and effectively block the proposed merger with Chessie. The extension will allow Seaboard stockholders to decide on the merger plan at an upcoming meeting without Southern Pacific influencing the deliberations, the ICC added.
The Southern Pacific should file a merger plan with the ICC if it wants to create a transcontinental line by joining with Seaboard, the agency said.