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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
(Amendment No. 4)
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
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Conrail Inc.
(Name of Subject Company)
Norfolk Southern Corporation
Atlantic Acquisition Corporation
(Bidders)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
208368 10 0
(CUSIP Number of Class of Securities)
SERIES A ESOP CONVERTIBLE JUNIOR
PREFERRED STOCK, WITHOUT PAR VALUE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
NOT AVAILABLE
(CUSIP Number of Class of Securities)
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JAMES C. BISHOP, JR.
EXECUTIVE VICE PRESIDENT-LAW
NORFOLK SOUTHERN CORPORATION
THREE COMMERCIAL PLACE
NORFOLK, VIRGINIA 23510-2191
TELEPHONE: (757) 629-2750
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
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with a copy to:
RANDALL H. DOUD, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
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This Amendment No. 4 amends the Tender Offer Statement on Schedule
14D-1 filed on October 24, 1996, as amended (the "Schedule 14D-1"), by
Norfolk Southern Corporation, a Virginia corporation ("Parent"), and its
wholly owned subsidiary, Atlantic Acquisition Corporation, a Pennsylvania
corporation ("Purchaser"), relating to Purchaser's offer to purchase all
outstanding shares of (i) Common Stock, par value $1.00 per share (the
"Common Shares"), and (ii) Series A ESOP Convertible Junior Preferred
Stock, without par value (the "ESOP Preferred Shares" and, together with
the Common Shares, the "Shares"), of Conrail Inc. (the "Company"),
including, in each case, the associated Common Stock Purchase Rights, upon
the terms and subject to the conditions set forth in the Offer to Purchase
dated October 24, 1996 (the "Offer to Purchase") and in the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"), copies of which were filed as Exhibits (a)(1) and
(a)(2) to the Schedule 14D- 1, respectively. Unless otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings given such terms in the Offer to Purchase or the Schedule 14D-1.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4 is hereby amended to add the following:
(a) As of November 4, 1996, Parent had received signed commitment
letters from banks for over $15 billion to fund its proposed acquisition of
the Company. Receipt by Parent of such commitments satisfies the Financing
Condition to the Offer.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE
BIDDER.
Item 5 is hereby amended to add the following:
(b) On November 4, 1996, Parent announced that it was having
discussions with CSX concerning the Offer and the Proposed CSX Transaction
consistent with Parent's previously announced position that the Company
cannot be acquired by either CSX or Parent without a plan to maintain a
balanced competitive structure for Eastern railroad service.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended to add the following:
On November 4, 1996, Parent filed its definitive proxy statement
with the SEC relating to its solicitation of proxies against the adoption
of the Articles Amendment at the Pennsylvania Special Meeting and provided
copies of the proxy statement to the Company for dissemination to the
Company's shareholders.
ITEM 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended to add the following:
At the hearing scheduled by the District Court on November 4, 1996
to hear arguments concerning the TRO Motion, counsel to the Company advised
the District Court that the Company Board had on that date adopted a
resolution deferring the "Distribution Date" under the Rights Agreement
"until such date as the Rights become exercisable (i.e., ten days after a
party other than CSX Corporation acquires more than 10% of Conrail's
shares)." Counsel to CSX advised the District Court that CSX had consented
to the terms of such resolution. In view of the fact that the Company and
CSX had taken the action that Norfolk Southern requested be ordered by the
District Court, the District Court stated that it was not necessary for the
District Court to take action concerning the TRO Motion.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended to add the following:
(a)(21) Press Release issued by Parent on November 4, 1996
(a)(22) Press Release issued by Parent on November 4, 1996
(a)(23) Press Release issued by Parent on November 4, 1996
(a)(24) Corrected Competitive Analysis dated November 4, 1996
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: November 5, 1996
NORFOLK SOUTHERN CORPORATION
By: /s/ JAMES C. BISHOP, JR.
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Name: James C. Bishop, Jr.
Title: Executive Vice President-Law
ATLANTIC ACQUISITION CORPORATION
By: /s/ JAMES C. BISHOP, JR.
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Name: James C. Bishop, Jr.
Title: Vice President and General
Counsel
EXHIBIT INDEX
Exhibit
Number Description Page
------- ----------- ----
(a)(21) Press Release issued by Parent on November 4, 1996
(a)(22) Press Release issued by Parent on November 4, 1996
(a)(23) Press Release issued by Parent on November 4, 1996
(a)(24) Corrected Competitive Analysis dated November 4, 1996
FOR IMMEDIATE RELEASE
NOVEMBER 4, 1996
News Media Contact: Robert C. Fort
(757) 629-2714
NORFOLK, VA -- Norfolk Southern CEO David R. Goode said today
that it is fully committed to its $100 per share tender offer in
cash for all the outstanding shares of Conrail. He added, Our
willingness to talk to CSX at its suggestion is consistent with
my previously announced position that Conrail cannot be acquired
by either CSX or NS without a plan to maintain a balanced
competitive structure for Eastern railroad service. While I am
heartened by CSX s willingness to discuss these matters, we have
no reason to believe that Conrail is prepared to accept that
reality. These discussions are consistent with a transaction
which would deliver $100 cash per share to Conrail
shareholders.
Norfolk Southern is fully committed to its $100 per share
all cash offer for Conrail and has received signed commitment
letters from banks for over $15 billion dollars to fund its
current offer. Accordingly, the financing condition of the
Norfolk Southern offer has been satisfied.
# # #
World Wide Web Site - http://www.nscorp.com
FOR IMMEDIATE RELEASE
NOVEMBER 4, 1996
Contact: Robert C. Fort
(757) 629-2714
NORFOLK, VA -- Norfolk Southern announced today that it
is having discussions with CSX about their respective
offers for Conrail. A Norfolk Southern spokesman said
that the basis for NS's participation in these
discussions is its commitment to provide strong
competitive service in the East for rail customers.
# # #
World Wide Web Site - http://www.nscorp.com
FOR IMMEDIATE RELEASE
NOVEMBER 4, 1996
News Media Contact: Robert C. Fort
(757) 629-2714
FACED WITH NS COURT CHALLENGE, CONRAIL AND CSX CONSENT TO DELAY
DISTRIBUTION OF POISON PILL
NORFOLK, VA -- Norfolk Southern announced today that, at a
hearing before the federal district court in Philadelphia in
which Norfolk Southern was seeking a temporary restraining
order, the Conrail Board informed the court that both Conrail
and CSX had consented to a delay of the Distribution Date of
rights under the Conrail poison pill.
A Norfolk Southern spokesman stated that Faced with our
legal action, Conrail and CSX were forced to postpone the
triggering of this outrageous lockup device. We remain
committed to our superior offer of $100 in cash per share, and
believe that this is an important step on the way to giving
Conrail shareholders a fair choice.
# # #
World Wide Web Site - http://www.nscorp.com
CSX/CR IS NOT UP/SP
FACTS
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WESTERN RAILROADS BALANCED
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A. In the West most major markets already were served
by both BNSF and UP before UP/SP.
1. only exceptions: New Orleans and Salt Lake City
B. Existing traffic flows and train schedules were in
place to form the critical mass necessary for
efficient BNSF operations.
1. competitive service hampered by low volumes
2. costs per unit higher with low volumes
C. The competitive rail infrastructure was largely in
place.
1. yard facilities
2. management
3. customer service
4. communications
5. repair facilities
D. Competition could be enhanced by providing
shorter, more efficient routes and industry
access.
I. NO BALANCE IN EAST
A. Competitive alternatives do not exist in most
northeastern markets.
1. In many markets, CR is the only Class 1 rail carrier.
a) New York City
b) Northern New Jersey
c) Boston
2. At many points in the East, CSXT is the
alternative network to Conrail. CSXT and CR are
the only Class 1 rail carriers in many major
markets.
a) Baltimore
b) Dayton
c) Indianapolis
d) Philadelphia (despite CP s minor presence)
e) Pittsburgh
f) Wilmington
g) Youngstown
B. Most rail competition that does exist in the
Northeast is fragile.
1. CP/D&H and NYS&W/DO into Northern New Jersey
2. Wheeling and Lake Erie into Pittsburgh
C. CSXT has the competitive infrastructure and
traffic base to give it the best starting point to
provide competitive enhancements through trackage
rights, etc. Anyone else would be non-viable.
D. CSXT already is significantly larger than NS:
1. 1995 operating revenues
a) CSXT 22% larger than NS
2. 1995 carloads handled
a) CSXT 21% larger than NS
CSX/CR IS NOT UP/SP
RESULTS
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II. LIMITED TRACKAGE RIGHTS PROVIDE ADEQUATE WESTERN SOLUTION
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A. BNSF can use its existing infrastructure to
support the trackage/haulage rights and switching
granted to it in UP/SP and can build on its
existing traffic base.
B. Even with an existing base of operations and
traffic, implementation of the UP/SP conditions is
moving slowly.
C. The western rail system will be reasonably
balanced.
1. 1995 operating revenues
a) 54% UP $9.54 billion
b) 46% BNSF $8.17 billion
2. 1995 carloads handled
a) 58% UP 10,097,760 carloads
b) 42% BNSF 7,244,418 carloads
3. route miles
a) 55% UP 38,366 miles
b) 45% BNSF 31,326 miles
III. OVERWHELMING CSX/CR DOMINANCE IN EAST
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A. CR's existing lock on parts of the Northeast will
be strengthened.
New York -- CR handled 83% of 1994 NY rail revenue
New Jersey -- CR handled 64% of 1994 NJ rail revenue
Massachusetts -- CR handled 63% of 1994 MA rail revenue
B. CSX/CR would control Class I track in most overlap
states.
1. Maryland -- 98%
2. Ohio -- 73%
3. Pennsylvania -- 99%
4. West Virginia -- 78%
5. Delaware -- 100%
C. CSX/CR would completely dominate the eastern rail
system.
1. 1995 operating revenues
a) 68% CSX/CR $8.4 billion
b) 32% NS $4.0 billion
2. 1995 carloads handled
a) 67% CSX/CR 9,284,027 carloads
b) 33% NS 4,459,808 carloads
3. route miles
a) 67% CSX/CR 29,346 miles
b) 33% NS 14,415 miles
D. CSX/CR is comparable to BNSF and UP merging in the
Gulf Coast with KCS as the only competitive
alternative.
November 4, 1996
