SFSP Receives 7 Offers to Buy Its SP Railroad

Santa Fe Southern Pacific said Friday it received seven offers to purchase the Southern Pacific railroad ranging in price from $750 million to “well over $1 billion” in addition to the assumption of the railroad’s debt.

SFSP said the offers were made by other railroads, non-railroad interests, Southern Pacific management and rail labor organizations. Thursday was the last day for bids. Analysts had valued the Southern Pacific at between $600 million and $800 million.

The sale is taking place to comply with an Interstate Commerce Commission ruling that prohibited the merger of Southern Pacific with SFSP’s other railroad, the Atchison, Topeka & Santa Fe, and ordered SFSP to divest itself of one or both of the lines. Subsequently, the corporation’s board announced that it would dispose of the SP.

Since the parent companies of the two railroads merged in 1983 to form SFSP, the two lines have been operated independently but the company had hoped to get ICC approval to merge them.

The company would not identify specific bidders Friday. Robert E. Gehrt, SFSP director of public relations, said that when the company sought bids it assured interested parties that they would not be identified publicly and that the contents of their bids would be kept confidential.

However, several bidders have identified themselves. Among them is the Railway Labor Executives Assn., representing the Southern Pacific’s unionized employees, which said it offered $750 million.