CSX Rises Most in Month as Rail-Merger Speculation PersistsThomas Black
CSX Corp. rose the most in more than a month as speculation of a merger with a Canadian railroad continues to swirl.
CSX has outperformed a U.S. railroad index since October when Canadian Pacific Railway Ltd. Chief Executive Officer Hunter Harrison said his bid to merge with CSX was spurned, said Matt Elkott, an analyst with Cowen & Co. Speculation has continued even though most analysts see U.S. regulators blocking major rail mergers.
The stock was also helped by a 9.4 percent increase in CSX’s intermodal cargo -- which can move by a combination of train, truck and ship -- reported in yesterday’s weekly traffic updates published by the Association of American Railroads, Elkott said.
“The bigger weight is around the speculation of the merger,” he said. “Once Hunter brought it up a few months ago, it wasn’t going to go away.”
Martin Cej, a spokesman with Canadian Pacific, and Melanie Cost, a spokeswoman with CSX, separately declined to comment.
A railroad industry merger eventually “has to happen for the benefit of the economy,” but for now there are no takers, Canadian Pacific Chief Operation Officer Keith Creel said at a Wolfe Research conference on May 20.
CSX rose 2.9 percent to $34.97 at the close of New York trading, the biggest gain since May 1. CSX has dropped 3.5 percent this year while the Standard & Poor’s 500 Railroads Index has dropped 14 percent.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.