Union Pacific Corp. plans to launch a cash tender offer for a controlling interest in Santa Fe Pacific Corp., despite the rejection of its earlier bids for the railroad company.
Union Pacific announced Tuesday it would, through a voting trust, offer to purchase about 57 percent of Santa Fe's shares for $17.50 each in cash directly from stockholders. It would then negotiate to acquire the rest of Santa Fe's shares for Union Pacific stock worth $17.50 a share.The proposal values Santa Fe at $3.3 billion. Santa Fe shareholders would receive about $10 per share in cash and $7.50 per share in Union Pacific stock if all Santa Fe shares are tendered.
Union Pacific is seeking to derail a merger between Santa Fe and Burlington Northern Inc. Santa Fe has agreed to merge with Burlington for about $3.18 billion in stock.
Union Pacific said it will begin its tender offer shortly, but the proposed merger would be subject to the termination of Santa Fe's merger plans with Burlington and the approval of Santa Fe shareholders.
Union Pacific's new bid follows the rejection of an offer last week to purchase Santa Fe for about $3.74 billion in stock and an earlier offer worth about $3.2 billion in stock.