Norfolk Southern Chairman Robert B. Claytor, quoting baseball's Yogi Berra, told his shareholders today that the firm's quest to acquire Conrail "ain't over 'til it's over," despite the opposition of Rep. John D. Dingell (D-Mich.).
Claytor spent almost half of his speech at Norfolk Southern's annual meeting here reaffirming his company's interest in purchasing the federal government's 85 percent share of Conrail. On the question of whether he would raise the cash offer from $1.2 billion to $1.9 billion as Transportation Secretary Elizabeth Hanford Dole has asked, Claytor reiterated that "we will consider her request."
In related developments, the Conrail Acquisition Corp., a joint venture of Allen & Co. and First Boston Corp. that is seeking to underwrite a public offering for Conrail, said it would "come up to" Dole's $1.9 billion expectation. And Dingell, chairman of the House Committee on Energy and Commerce, wrote Dole today that any plan to merge Conrail with Norfolk Southern was unacceptable to him.
Dole opposes a public offering that would leave Conrail as a stand-alone entity because she feels that its long-term viability requires its purchase by a financially strong company. Dingell, whose committee must approve any Conrail sale, supports a public offering but has not endorsed either Conrail Acquisition Corp. or another proposal from Morgan Stanley & Co.
Norfolk Southern's directors met for three hours here after the shareholders' meeting, and no doubt discussed Dole's request. Later, Claytor told reporters, "It's hard to say 'No comment.' But there are times when that's what you have to say, and this is one of them."
Magda Ratajski, Norfolk Southern's vice president for public relations, said, "There are several things that have to be resolved."
On April 28, Dingell came out against the Norfolk Southern proposal and called it "unacceptable," even after Dole sought to boost the purchase price.
As a practical matter, if Norfolk Southern wants to stay in the race, it will have to meet the price set by Dole. Legislation approving the purchase by Norfolk Southern already has passed the Senate, and administration support seems vital to prop up whatever chance Norfolk Southern still has.
"Without Chairman Dingell's support, or at least his acquiescence," Claytor said in his speech, "it is unlikely that the House will pass legislation necessary to authorize and implement the sale. However, to use the words of former baseball player Yogi Berra, 'It ain't over 'til it's over.' "
Claytor was asked by a shareholder how long the offer for Conrail will remain open. The offer expires June 30, but already has been extended once.
"I would not think we would extend it beyond the end of this year," Claytor said. "That would mean beginning all over again with a new Congress, and I don't believe we want to do that." Claytor already has said that he will retire as chairman at the end of this year.
In his speech, Claytor said that "Without Conrail, we would have to revise our long-term marketing strategy, particularly in the Northeast . . . . "