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CONRAIL INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORFOLK SOUTHERN CORPORATION
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THE REGISTRANT)
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FOR IMMEDIATE RELEASE
DECEMBER 19, 1996
Media Contact: Robert Fort
757-629-2714
NORFOLK SOUTHERN INCREASES CASH BID FOR
CONRAIL TO $115 PER SHARE
COMPANY TO CHALLENGE CONRAIL/CSX
EXTENSION OF 'LOCKUP' PROVISION
NORFOLK, VA - Norfolk Southern Corporation (NYSE: NSC)
today announced that it has increased to $115 per share
its all-cash offer for all of Conrail Inc.'s outstanding
common shares and Series A ESOP convertible junior
preferred shares. The $115 per-share offer gives
shareholders a premium of more than $14 per share (or 14
percent) over the remaining blended value of CSX's
revised cash-and-stock proposal for Conrail.*
As with its earlier offers, Norfolk Southern's
revised proposal continues to offer significant benefits
to Conrail shareholders. The increased offer provides
for an immediate cash payment for shares purchased into a
voting trust and is not contingent upon any federal
regulatory approval.
Norfolk Southern's offer is worth over $1 billion
more than CSX's latest proposal. CSX's proposed deal
also still depends on the uncertain value of CSX stock at
some time in the future.
"Our increased offer underscores our determination
to acquire Conrail," said David R. Goode, Norfolk
Southern's Chairman, President and Chief Executive
Officer. "We remain committed to giving shareholders a
fair choice and achieving a Conrail/Norfolk Southern
combination because it is the perfect combination for
shareholders, employees, shippers and consumers."
Norfolk Southern said it will challenge the legality
of a provision in the CSX/Conrail agreement that extends
the lockup period until December 31, 1998. Norfolk
Southern said the U.S. District Court in Philadelphia has
scheduled a hearing on that issue for January 9, 1997.
The Court has also agreed to consider a second issue
regarding whether CSX now owns 20 percent of Conrail's
shares and is an interested shareholder, which would
require CSX to pay all Conrail shareholders $110 per
share in cash under Pennsylvania's Fair Value Statute.
In agreeing not to discuss any other merger proposal
for two years, Conrail's board has again shown its
disdain for the interests of the corporation and its
shareholders, Norfolk Southern said. Norfolk Southern is
convinced the courts ultimately will not approve the
Conrail board's wholesale abrogation of its fiduciary
duties to all of its constituencies.
Norfolk Southern reiterated that its offer for
Conrail ensures balanced competition in the East with the
least disruption to operations and service. The size and
scope of the divestitures which would be required to make
a CSX/Conrail combination acceptable would impose
significant costs on the new company. These costs are
for the most part avoidable with a Norfolk
Southern/Conrail combination because the two railroads
have much less overlap.
* Based on the closing price of CSX stock on 12/19/96
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