After a series of court battles, CSX finally began acquiring stock in Texas Gas Resources Corp. late Saturday for $52 a share in a deal valued at more than $1 billion.
The acquisition had been opposed by the Water Transport Association, which argued that it would violate antitrust laws.
"We started buying at one minute after 7:00 p.m. on Saturday," CSX spokesman Edwin Edel said. "By 7:05 p.m., we had 15 million shares, which represented 72 percent of the outstanding stock." As of late yesterday, Edel said, Richmond-based CSX owned 90.6 percent of Texas Gas' shares.
The stock purchase began shortly after Supreme Court Justice Lewis Powell refused Saturday night to block the nation's third largest rail carrier from acquiring Texas Gas Resources Corp. stock.
Powell denied a request by the Water Transport Association, a barge operators trade group, to prevent CSX from concluding the stock purchase, removing the last apparent block to the takeover.
The U.S. Circuit Court of Appeals for the District of Columbia had extended an injunction against the takeover until 7 p.m. Saturday, but the stay expired when Powell declined to order another.
In their Supreme Court appeals, the barge operators complained the appeals court approved the stock purchase even though the Interstate Commerce Commission has not held full-fledged hearings.
The court's action "has established a precedent whereby any railroad . . . could acquire a water carrier and then, when it sees fit, apply later to the ICC for approval."
Texas Gas, based in Owensboro, Ky., primarily runs a natural gas pipeline system but about 10 percent of its revenues come from its barge line, American Commercial Barge Lines Inc.
The 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," WTA lawyers argued.
In a 2-1 ruling late Thursday, the appeals court concluded the takeover does not violate the Panama Canal Act, which restricts railroads from acquiring competing water carriers.
The appeals court upheld an ICC decision that it is all right for CSX to buy Texas Gas stock as long as stock in its barge line subsidiary is placed in a trust, over which CSX could not exert control, pending an ICC hearing.