[Federal Register Volume 60, Number 83 (Monday, May 1, 1995)]
[Notices]
[Pages 21216-21217]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10633]



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INTERSTATE COMMERCE COMMISSION
[Finance Docket No. 32133]


Union Pacific Corporation, Union Pacific Railroad Company and 
Missouri Pacific Railroad Company--Control--Chicago and North Western 
Transportation Company and Chicago and North Western Railway Company

AGENCY: Interstate Commerce Commission.

ACTION: Decision No. 27; notice that the Commission has been requested 
to issue a finding that the terms and conditions of the proposed merger 
of UP Rail, Inc., into Chicago and North Western Transportation Company 
are just and reasonable.

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SUMMARY: UP Rail, Inc. (a subsidiary of Union Pacific Corporation) is 
to be merged into Chicago and North Western Transportation Company (the 
holding company parent of Chicago and North Western Railway Company), 
assuming the success of a tender offer that was commenced on March 23, 
1995. The merger envisions, among other things, a tender offer to 
stockholders of $35 per share and a ``cashing out'' of all non-
tendering stockholders at a price of $35 per share. The Commission has 
been requested to issue a finding that the terms and conditions of the 
merger are just and reasonable.

DATES: Comments must be filed by May 31, 1995. Replies must be filed by 
June 15, 1995.

ADDRESSES: All pleadings should refer to Finance Docket No. 32133. 
Comments (an original and 10 copies) should be sent to: Office of the 
Secretary, Case Control Branch, Interstate Commerce Commission, 1201 
Constitution Avenue, NW., Washington, DC 20423. Comments should also be 
served (one copy each) on: (1) Arvid E. Roach II, Covington & Burling, 
1201 Pennsylvania Avenue, NW., P.O. Box 7566, Washington, DC 20044-
7566; and (2) L. John Osborn, Suite 600, East Tower, 1301 K Street, 
NW., Washington, DC 20005. Replies (an original and 10 copies) should 
be sent to: Office of the Secretary, Case Control Branch, Interstate 
Commerce Commission, 1201 Constitution Avenue, NW., Washington, DC 
20423. Replies should also be served (one copy each) on all active 
parties in this proceeding, counsel for the plaintiffs in the Delaware 
shareholder suits referenced [[Page 21217]] below, and any known 
shareholders of Chicago and North Western Transportation Company who 
have not tendered their shares in the tender offer commenced March 23, 
1995, by UP Rail, Inc.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-5610. [TDD for 
the hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: In our UP/CNW Decision No. 25 (served March 
7, 1995), we approved common control of UP (class I railroads Union 
Pacific Railroad Company and Missouri Pacific Railroad Company) and CNW 
(class I railroad Chicago and North Western Railway Company). Union 
Pacific Railroad Company (UPRR) and Missouri Pacific Railroad Company 
(MPRR) are indirect wholly owned subsidiaries of Union Pacific 
Corporation (UPC), a non-carrier holding company. CNW is a direct 
wholly owned subsidiary of Chicago and North Western Transportation 
Company (CNWT), another non-carrier holding company. UPC, UPRR, MPRR, 
CNWT, and CNW are referred to herein as the primary applicants. The UP/
CNW common control that we approved envisioned that UP and CNW would 
come under common control with the conversion, from non-voting status 
to voting status, of the approximately 29.5% of the CNWT common stock 
held by non-carrier UP Rail, Inc. (UPR), another indirect wholly owned 
UPC subsidiary. Our UP/CNW Decision No. 25 became effective on April 6, 
1995.
    On March 16, 1995, UPC and CNWT entered into an Agreement and Plan 
of Merger (the Merger Agreement) that provides, among other things, (1) 
that UPR will make a tender offer for 100% of CNWT's common stock at a 
price of $35 per share in cash, and (2) that all non-tendering CNWT 
shareholders will also receive $35 per share in cash following the UPR/
CNWT merger. The tender offer was commenced on March 23, 1995, and is 
scheduled to expire on April 24, 1995.
    By petition (UP/CNW-134) filed April 4, 1995, the primary 
applicants have requested that we issue a determination that the terms 
and conditions of the proposed UPR/CNWT merger (in particular, the $35-
per-share price to be paid to CNWT shareholders) are just and 
reasonable. The primary applicants seek this determination (1) because 
they believe the Commission is required by Schwabacher v. United 
States, 334 U.S. 182 (1948), to make such a determination to protect 
minority shareholders and (2) in order to immunize the UPR/CNWT merger 
from the otherwise applicable state law rights, particularly the 
otherwise applicable state law appraisal rights, of dissenting CNWT 
shareholders. 49 U.S.C. 11341(a). A copy of the Merger Agreement can be 
found in UP/CNW-134, Exhibit B, Annex I.
    The primary applicants indicate that they have served a copy of 
their UP/CNW-134 petition on all active parties in the Finance Docket 
No. 32133 proceeding and on counsel for plaintiffs in certain Delaware 
shareholder suits challenging various aspects of the Merger Agreement. 
The primary applicants have also pledged to serve a copy of their 
petition on any known CNWT shareholders who do not tender their shares 
in response to the tender offer. The primary applicants urge expedited 
handling of their petition (in particular: that we publish notice of 
their petition in the Federal Register; that we allow interested 
persons 30 days to file comments; that we further allow the primary 
applicants an additional 15 days to file a reply; and that we proceed 
promptly to a decision thereafter).
    Our statutory mandate, 49 U.S.C. 11344(c), requires, among other 
things, that we determine, in appropriate cases, that the terms and 
conditions of certain transactions affecting stockholders are just and 
reasonable. See, e.g., Union Pacific Corp. et al.--Cont.--MO-KS-TX Co. 
et al., 4 I.C.C.2d 409, 515 (1988) (``In appraising this transaction 
affecting the rights of stockholders, it is incumbent upon us to see 
that the interests of minority stockholders are protected and that the 
overall proposal is just and reasonable to those stockholders. 
Schwabacher v. United States, 344 U.S. at 198, 201.''). Because the UP/
CNW-134 petition implicates our statutory mandate and involves a matter 
that requires expedited regulatory action, we will proceed upon the 
schedule urged by the primary applicants.
    Accordingly, we solicit comments from all interested persons 
respecting whether the terms and conditions of the proposed UPR/CNWT 
merger are just and reasonable. Such comments must be submitted by May 
31, 1995. The primary applicants may file replies to such comments by 
June 15, 1995.
    Any interested person who has not received copies of the UP/CNW-134 
petition and the primary applicants' letter dated April 17, 1995 
(announcing a settlement of the Delaware litigation) may request 
copies, in writing or by telephone, from Arvid E. Roach II, Covington & 
Burling, 1201 Pennsylvania Avenue, N.W., P.O. Box 7566, Washington, 
D.C. 20044-7566 (telephone: 202-662-5388).
    In addition to submitting an original and 10 copies of all 
documents filed with the Commission, the primary applicants and any 
commenters are encouraged to submit all pleadings and attachments as 
computer data contained on a 3.5-inch floppy diskette formatted for 
WordPerfect 5.1 (or formatted so that it can be converted by 
WordPerfect 5.1). The primary applicants are also encouraged to submit 
their UP/CNW-134 petition (including Exhibits A and B thereto), and 
their letter dated April 17, 1995 (including Exhibits A and B thereto), 
on such a diskette.

    Decided: April 19, 1995.

    By the Commission, Chairman Morgan, Vice Chairman Owen, and 
Commissioners Simmons and McDonald.
Vernon A. Williams,
Secretary.
[FR Doc. 95-10633 Filed 4-28-95; 8:45 am]
BILLING CODE 7035-01-P