CSX Corp., stymied by a federal court injunction from buying Texas Gas Resources Corp., yesterday said it will extend its offer on a day-by-day basis until the U.S. Court of Appeals for the District of Columbia rules on whether to allow the acquisition.
As of yesterday, Texas Gas shareholders had offered to sell CSX about 18.9 million of the 20.6 million outstanding common shares of Texas Gas stock, said Ed Edel, a CSX spokesman.
The CSX tender offer for Texas Gas was to have expired Tuesday. It was extended until yesterday and will be extended daily until the court rules on a lawsuit to block the takeover filed by the the Water Transport Association, an industry trade group representing 11 barge companies.
CSX, based in Richmond and the largest railroad in the country, outbid Coastal Gas Corp. of Houston in a takeover competition for Texas Gas in June. Actual acquisition of the stock was blocked by the barge lines' lawsuit.
Texas Gas runs gas pipelines, trucking, boat building operations, oil and natural gas exploration companies and American Commercial Barge Lines, the largest barge company in the country in revenues.
The Water Transport Association contends that the Panama Canal Act precludes railroads from owning barge companies. WTA also argues that CSX should not be allowed to acquire Texas Gas until after an Interstate Commerce Commission hearing.
The ICC earlier allowed the acquisition after CSX promised to place control of American Commercial Lines in a voting trust. WTA argues that would still violate the law.
CSX made its initial bid to acquire Texas Gas in June when the latter company was fighting a hostile takeover attempt by Coastal Corp. of Houston.
In two weeks of subsequent scuffles with Coastal, CSX offered to buy 35 percent of Texas Gas' stock for $52 a share and later extended the offer to include all the stock. The offer totals about $1.07 billion.
Coastal dropped out of the bidding June 23, but a week later the WTA got a temporary restraining order blocking CSX from buying Texas Gas stock.