Supreme Court Justice William Brennan yesterday refused to block CSX Corp. of Richmond from acquiring Texas Gas Resources Corp. for more than $1 billion.
Brennan denied a request by the Water Transport Association, an organization of barge operators, to block the purchase by CSX, the nation's third-largest railroad.
The unsuccessful appeal to the Supreme Court came after the U.S. Circuit Court of Appeals for the District of Columbia lifted an injunction late Thursday that had blocked the stock deal since late June.
While a CSX attorney proclaimed, "They're dead, it's over," the barge owners threatened to try to get Chief Justice Warren Burger to intervene. Unless that long shot succeeds, CSX can begin purchasing Texas Gas stock after 7 p.m. today.
CSX outbid Coastal Corp. for Texas Gas. After Coastal made an unsolicited and unwelcome bid for Texas Gas, CSX responded with its own offer, which it eventually raised to $52 in cash for each share of Texas Gas.
CSX, a coal-hauling railroad, was formed in 1980 through the merger of Chessie Systems Inc. and Seaboard Coast Line Industries Inc.
Texas Gas, based in Owensboro, Ky., primarily runs a natural gas pipeline system but has trucking, boat-building and oil and gas exploration operations; about 10 percent of its revenues come from its barge line, American Commercial barge Lines Inc., which operates east of the Mississippi River.
In their Supreme Court appeal, the barge operators complained that the appeals court approved the stock purchase even though the Interstate Commerce Commission has not held full-fledged hearings.
The appeals court decided "in effect that an independent water transport industry, which Congress has sought to preserve as a competitive counterweight to the railroads, is no longer to exist," Water Transport's lawyers argued.
In a 2-1 ruling issued late Thursday, the appeals court concluded that CSX can buy Texas Gas stock so long as stock in its barge line subsidiary is placed in a trust, over which CSX could not exert control, pending an ICC hearing.