-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F2g1WGxq41m2UWhEop8dXwHUZbFG2hh0GJIGxLVkBBJs5DStJvzx184eS4RRuULl JjmEqEquml6Kgroyz4QWrQ== 0000950172-97-000006.txt : 19970108 0000950172-97-000006.hdr.sgml : 19970108 ACCESSION NUMBER: 0000950172-97-000006 CONFORMED SUBMISSION TYPE: DFAN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970107 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONRAIL INC CENTRAL INDEX KEY: 0000897732 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 232728514 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12184 FILM NUMBER: 97502186 BUSINESS ADDRESS: STREET 1: TWO COMMERCE SQ STREET 2: P O BOX 41417 CITY: PHILADELPHIA STATE: PA ZIP: 19101-1417 BUSINESS PHONE: 2152094434 MAIL ADDRESS: STREET 1: P.O. BOX 41429 STREET 2: 2001 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19101-1429 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NORFOLK SOUTHERN CORP CENTRAL INDEX KEY: 0000702165 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 521188014 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A BUSINESS ADDRESS: STREET 1: THREE COMMERCIAL PL CITY: NORFOLK STATE: VA ZIP: 23510-2191 BUSINESS PHONE: 8046292680 DFAN14A 1 SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant / / Filed by a Party other than the Registrant /X/ Check the appropriate box: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) / / Definitive Proxy Statement /X/ Definitive Additional Materials / / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 CONRAIL INC. (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NORFOLK SOUTHERN CORPORATION (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT) Payment of Filing Fee (Check the appropriate box): /X/ No fee required. / / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: -------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: -------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): -------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: -------------------------------------------------------------------- (5) Total fee paid: -------------------------------------------------------------------- / / Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: -------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: -------------------------------------------------------------------- (3) Filing Party: -------------------------------------------------------------------- (4) Date Filed: -------------------------------------------------------------------- January 1997 [NORFOLK SOUTHERN LOGO] NORFOLK SOUTHERN SHAREHOLDER PRESENTATION NORFOLK SOUTHERN IS OFFERING CONRAIL SHAREHOLDERS SUPERIOR VALUE -------------------------------------------------------------------- NORFOLK SOUTHERN OFFER * Nominal value of $115.00 per share1 * 8.4BN total value2 * No equity risk - all cash * No synergy risk - all cash * Immediate value CSX OFFER * Nominal value of $97.62 per share3 * $7.0BN total value2 * Equity risk - 75% common and convertible stock * Trading discount risk - convertible stock * Synergy risk - 75% common and convertible stock ------------------ 1 Represents premium of 18% over CSX's offer 2 For remaining shares (not already owned by CSX) 3 Based on 25% cash/75% stock, reflects CSX 1/6/97 closing price of $41.75 CSX'S OFFER - MUCH LESS VALUE, REALLY HOSTILE TO SHAREHOLDERS -------------------------------------------------------------------- MUCH LESS VALUE EARLIEST VALUE RECEIPT DATE -------------------------------------------------------------------- CSX common $77.50 1 Spring 1997(?) ($41.75 x 1.85619) Convertible preferred $16.00 2 Spring 1997(?) ------ $93.50 x .75 ------ 75% equity component $70.12 25% cash component $27.50 January 1997 ($110 x 25%) ------ Nominal consideration $97.62 per Conrail share ====== REALLY HOSTILE * Hostile approach - coercive bid * Hostile structure - multi-tier, front-end loaded * Hostile currency with uncertain value for 75% of the bid * Terms of convertible preferred are not defined (i.e., mystery stock) * Subjects Conrail shareholders to unnecessary equity market risks ----------------- 1 Based on CSX 1/6/97 closing price of $41.75 2 Theoretical value CSX'S OFFER EXPOSES SHAREHOLDERS TO SIGNIFICANT EQUITY RISK FOR MOST OF THE CONSIDERATION RECEIVED -------------------------------------------------------------------- Assumed Resultant NS premium Assumed CSX convertible blended to CSX offer stock value value1 value value -------------------------------------------------------------------- $43.00 $16.00(?) $99.36 15.7% $42.50 $16.00(?) $98.67 16.6% $42.00 $16.00(?) $97.97 17.4% $41.50 $16.00(?) $97.27 18.2% $41.00 $16.00(?) $96.58 19.1% $40.50 $16.00(?) $95.88 19.9% $40.00 $16.00(?) $95.19 20.8% $39.50 $16.00(?) $94.49 21.7% $39.00 $16.00(?) $93.79 22.6% ----------------- 1 Convertible stock, theoretically worth $16 per share, will be received for 75% of the Conrail shares currently outstanding and not owned by CSX. This convertible preferred is likely to trade at a significant discount to par. SUMMARY OF THE CSX OFFER -------------------------------------------------------------------- THE CSX OFFER TO CONRAIL SHAREHOLDERS * Provides less value * Includes CSX stock subject to market risks - Equity market fluctuations - Bears risk of regulatory approval - Bears risks of realization of promised synergies * Includes undefined convertible preferred stock - Uncertain value prior to acquisition - Market risk after acquisition * Requires CSX shareholder approval of a dilutive transaction * Seeks to preclude Conrail shareholders from accepting a superior all-cash offer * Provides an undesirable template for other coercive merger transactions A VOTE AGAINST WILL INCREASE THE VALUE OF YOUR CONRAIL SHARES -------------------------------------------------------------------- A VOTE AGAINST THE PROPOSED CSX TRANSACTION WILL 1. FORCE CSX TO INCREASE ITS BID FOR CONRAIL AGAIN OR 2. FORCE THE CONRAIL BOARD TO ACCEPT NORFOLK SOUTHERN'S SUPERIOR ALL-CASH $115 OFFER FOR ALL CONRAIL SHARES CONRAIL SHAREHOLDERS SHOULD VOTE AGAINST: 1. Opting out of the Pennsylvania statute requiring fair value for all shareholders, and 2. Allowing Conrail management to adjourn the meeting (if it appears that the vote will be unfavorable) -----END PRIVACY-ENHANCED MESSAGE-----