PAR: Fink Reassures Employees Over CSX Sale Exposure

FINK'S LETTER TO EMPLOYEES REGARDING CSX SALE AFFIRMS WHAT IT DENIES.

Fink letter to PAR employees

09.November – The NS letter to STB blew up the railroading internet like a Broadway beauty parlor after opening night. PAR has done a great job of making sure that no news of the sale has gotten out, they couldn’t do anything about this bit getting in. It must have caused a stir. On Mon.09.Nov evening, PAR employees received this letter from David A. Fink:

Dear Employee,

As everyone is aware, over the past few months the company has been negotiating a sale with multiple bidders. Given the fluid nature of those negotiations, we have withheld any comments until a final bidder is selected, if at all.

However, it has come to my attention that Norfolk Southern has sent a letter to the STB regarding its views as to one potential bidder. This was a decision made by NS and does not mean that a sale has been finalized. I can assure you that all employees will be notified prior to any public announcement of a sale, but we are not there yet. As I have stated, the sale is a process of which we have made no comment because it is constantly changing[;] we are currently still negotiating with multiple entities.

What we can say is we have spent the summer meeting, touring, and providing information to the current interested parties as well as others who have since decided they were not going to participate. In our opinion, NS is objecting to one party because of fear of competition. However, any decision will take into account the impacts of a sale on employees, customers and connecting carriers, despite concerns raised by NS or any other party.

Thanks again for your continued understanding and support.

Sincerely,

David A. Fink
President                                                                                                                                                       {Exclusive ANRP sources}

That artful missive does a great job of saying nothing and implying everything. It is no doubt true that the sale has not been finalized, but what interest would NS have in getting the Board out of bed early, unless key details of a deal are being structured – in particular, the manner of trusteeship – in ways perceived by NS as threatening, and even in violation of the 2008 Agreement that formed PAS? As far as invoking “[current negotiations] with multiple entities,” it’s obvious that, in the end, several entities will be owning/operating pieces of PAR. Then, instead of just leaving well-enough alone, the letter speculates on NS’s motive for alerting the STB: “NS is objecting … because of fear of competition.” But NS’s letter explicitly expects that competitive operating issues will be resolved by the Board, and that NS’s main concern as its PAS partner flings itself into CSX’s arms, is to protect NS’s own rights along the course of the transaction, during which time CSX will have full control of one mainline (CSX B&A), and potential imputed control of the other (PAS Patriot Corridor), in the event of a voting trust managing PAR’s affairs.