SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
(Amendment No. 35)
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
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)
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)
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
This Amendment No. 35 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"), as amended and supplemented by the Supplement,
dated November 8, 1996 (the "First Supplement"), and the Second
Supplement, dated December 20, 1996 (the "Second Supplement"), and in the
revised Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer"). Unless otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings given such terms in the Offer to Purchase, the First Supplement,
the Second Supplement or the Schedule 14D-1.
Item 10. Additional Information.
Item 10 is hereby amended and supplemented by the following:
(e) On January 9, 1997, the STB denied, as premature, Parent's
petition for an order declaring that the No Negotiation Provision, as in
effect after the Second Amendment, gave CSX unlawful control over the
Company.
In denying the petition, the STB stated that the No Negotiation
Provision would not preclude the STB from approving Parent's Proposed
Merger. The STB, which indicated that the No Negotiation Provision
"appears excessive on its face," also stated that the No Negotiation
Provision could not be used to interfere with consummation of a
Parent-Company transaction once it had been approved.
The STB explained that applicable law can preempt contractual
rights, including the No Negotiation Provision, if necessary to permit
consummation of an STB- approved transaction. Thus, CSX and the Company
cannot preclude approval of a transaction by entering into a contract
that purports to prevent all alternatives to their own preferred outcome.
On January 9, 1997, the District Court declined to issue a
Preliminary Injunction enjoining the Pennsylvania Special Meeting.
Plaintiffs are appealing the District Court ruling to the Third Circuit
and are asking such court to hear the appeal on an expedited basis.
Item 11. Material to be Filed as Exhibits.
Item 11 is hereby amended and supplemented by the following:
(a)(83) Text of Letter sent to certain Company shareholders
commencing January 8, 1997.
(a)(84) Press Release issued by Parent on January 8, 1997.
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: January 9, 1997
NORFOLK SOUTHERN CORPORATION
By: /s/ JAMES C. BISHOP, JR.
Name: James C. Bishop, Jr.
Title: Executive Vice President-Law
ATLANTIC ACQUISITION CORPORATION
By: /s/ JAMES C. BISHOP, JR.
Name: James C. Bishop, Jr.
Title: Vice President and General Counsel
EXHIBIT INDEX
Exhibit
Number Description
(a)(83) Text of Letter sent to certain Company shareholders
commencing January 8, 1997.
(a)(84) Press Release issued by Parent on January 8, 1997.
[NORFOLK SOUTHERN LOGO]
January 9, 1997
Dear Conrail Shareholder:
DON'T "OPT OUT" OF YOUR RIGHT TO RECEIVE FAIR VALUE
Conrail's special meeting is now only 8 days away. Vote AGAINST Conrail's
proposal today to protect the value of your investment. Please sign, date and
return the enclosed GOLD proxy card (or GREEN instruction card) today.
Join those who are demanding that the Conrail Board secure the superior
benefits of the Norfolk Southern offer for all constituencies.
GREATER VALUE FOR SHAREHOLDERS
Norfolk Southern's $115 all-cash, all-shares offer -with prompt payment
through use of a voting trust-is worth 18%(1) more than CSX's current deal.
And it does not subject you to the substantial equity risk presented by
receiving part of your payment in CSX stock, which has already declined 15%(1)
since the CSX offer for Conrail was announced.
BETTER FOR CONRAIL EMPLOYEES
A merger between CSX and Conrail would eliminate competitive service in 64
cities, and Conrail's Hollidaysburg and Altoona shops are within 70 miles of
CSX's facilities at Cumberland, Maryland. Redundancies like these could add up
to lost jobs. A Norfolk Southern/Conrail system would have substantially less
overlap.
In addition, CSX was recently named again as having one of the nation's 50
largest underfunded pensions.(2) With a Norfolk Southern/Conrail combination,
Conrail employees would become part of one of the most financially sound and
safest major railroads in America.
A MORE COMPETITIVE ENVIRONMENT FOR SHIPPERS
A CSX/Conrail combination would eliminate competitive service in major
markets, such as Philadelphia, Baltimore, Youngstown and Pittsburgh. A Norfolk
Southern/Conrail combination will provide balanced competition by creating a
strong rail alternative to compete with CSX.
A STRONGER COMMITMENT TO THE ECONOMIES OF PHILADELPHIA AND PENNSYLVANIA
Norfolk Southern is committed to maintaining a major operating presence in
Philadelphia and has announced plans for a multimodal rail-highway facility at
the Philadelphia Navy Base. We are committed to continuing to operate Conrail's
Hollidaysburg Car Shop and its Juniata Locomotive Shop in Altoona, and will
seek to promote employment at both locations. What has CSX promised?
* * *
CONRAIL SHAREHOLDERS: Protect the value of your shares. Vote now on Norfolk
Southern's GOLD proxy card AGAINST Conrail's proposals to "opt out" of
Pennsylvania's Fair Value Statute and to adjourn the special meeting scheduled
for January 17. Be sure Norfolk Southern receives your proxy before January 17.
CONRAIL ESOP PARTICIPANTS: Your instruction to the Trustee is especially
important since your instruction to the Trustee directs the voting of several
shares. Use your GREEN instruction card to confidentially instruct your Trustee
to vote AGAINST Conrail's proposals. Be sure the Trustee receives your
instruction card by January 15.
Sincerely,
Norfolk Southern Corporation
- --------------
(1) Based on the closing price of CSX on January 8, 1997.
(2) Pension Benefit Guaranty Corporation: News Release 97-09, 12/12/96.
IMPORTANT INFORMATION
If your Conrail shares are held in the name of a bank or broker, only your
bank or broker can vote your shares and only upon receipt of your specific
instructions. Please instruct your bank or broker to vote AGAINST Conrail's
proposals by executing the GOLD proxy card today. If you have any questions or
require any assistance in voting your shares, please call:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
CALL TOLL FREE: 800-223-2064
Banks and Brokers call: 212-440-9800
FOR IMMEDIATE RELEASE
January 9, 1997
Media Contact: Robert Fort
(757) 629-2710
NORFOLK SOUTHERN TO APPEAL RULING ON PRELIMINARY INJUNCTION AGAINST
CONRAIL, WELCOMES SURFACE TRANSPORTATION BOARD POSITION ON LOCK-OUT
NORFOLK, VA -- Norfolk Southern Corporation (NYSE: NSC) issued
the following statement in response to U.S. District Court Judge
Donald VanArtsdalen's decision today declining to issue a
preliminary injunction enjoining the Conrail shareholders
meeting scheduled to be held January 17 and a separate decision
today by the Surface Transportation Board:
"Norfolk Southern is appealing the Court's ruling to the
U.S. Third Circuit Court of Appeals in Philadelphia and is asking
the Court to hear the appeal on an expedited basis.
"Regardless of the outcome of our appeal, Conrail
shareholders will have an opportunity on January 17 to regain
control of the corporation they own. By rejecting the proposed
'opt out' of Pennsylvania's fair value statute they can send a
clear message to Conrail's board that CSX's latest bid is
unacceptable and that shareholders want the opportunity to
consider Norfolk Southern's superior all-cash offer of $115 per
share --- an offer worth over $1 billion more than CSX's.
"Today's ruling in no way contradicts the fact that Conrail
and CSX are continuing to wage a campaign of coercion to deny
Conrail shareholders that opportunity and force them to go along
with CSX's inferior offer.
"Norfolk Southern is pleased that the Surface
Transportation Board, acting on its petition to invalidate the
lock-out provision, today issued a decision acknowledging that
the two-year lock-out period 'appears excessive on its face.'
"The Board emphasized that the lock-out provision would not
preclude it from approving Norfolk Southern's proposal to acquire
Conrail or keep Norfolk Southern from consummating the merger
once it is approved.
"While the Board said it was premature to void the provision
at this time, it held that federal law would void the lock-out
provision if the Board approves a Norfolk Southern/Conrail
combination. In language applicable to CSX and Conrail, the
Board said: 'A person cannot effectively preclude our approval
of a transaction from going forward simply by entering into a
contract that purports to prevent all alternatives to its own
preferred outcome.'
"Norfolk Southern remains committed to its offer to acquire
Conrail and to deliver to Conrail shareholders $115 in cash for
each of their shares. As announced yesterday, Norfolk Southern
has received commitments from banks that provide more than enough
money to fully fund its all-cash offer."
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