RICHMOND -- The Virginia Retirement System says it will become the second-largest holder of RF&P Corp. stock by buying 1.27 million shares, most of it from Norfolk Southern Corp.
Mark T. Finn, chairman of the VRS investment advisory committee, said last week the price paid to Norfolk Southern for each share of RF&P stock is $34.50.
That was the same price Richmond-based CSX Corp. offered to pay RF&P shareholders earlier this year. A proposed merger of CSX and RF&P failed following intense public debate about the deal and the fairness of the $34.50 a share offer.
CSX is the largest holder of RF&P stock.
Finn said a primary goal in buying the ''tremendously undervalued'' stock was to strengthen the fund's negotiating position in case another merger attempt is made involving RF&P.
VRS, an $11 billion state pension fund, already owned 550,400 shares of RF&P common stock and almost 3 million dividend obligation shares prior to striking a deal with Norfolk Southern. RF&P has several classes of stock: common, dividend obligations, and 6 percent and 7 percent guaranteed.
This transaction will increase the VRS holdings in dividend obligations to 4.2 million shares.