Burlington Northern Says It Won’t Raise Bid for Santa Fe

Burlington Northern Inc., under pressure to raise its bid for Santa Fe Pacific Corp. following a higher offer by Union Pacific Corp. over the weekend, will stand pat, a Burlington spokesman said Monday.

Burlington Northern has already signed a friendly merger agreement with the owner of the Atchison, Topeka & Santa Fe railroad for $3.2 billion, up from an original $2.8 billion.

Its latest offer was topped Sunday by Union Pacific, which said it will pay $3.8 billion if Santa Fe will break its earlier deal.

Burlington spokesman James Sabourin said the comments made by Chairman and Chief Executive Gerald Grinstein to industry analysts Friday still stand.

“It is a responsible and realistic proposal, which represents Burlington Northern’s best and final bid,” Grinstein said.

Santa Fe said Sunday that it will consider the higher offer from Bethlehem, Pa.-based Union Pacific, but it sent a clear signal that it still favors a merger with Burlington Northern.

It said a merger with Burlington Northern would clear federal regulatory hurdles, while a combination with Union Pacific would probably be blocked.

Industry analysts said Monday that Union Pacific’s higher offer still does not address regulatory concerns that a combination of the two companies’ rail systems would be opposed by the Interstate Commerce Commission on antitrust grounds.

“It ups the ante a little bit, but it doesn’t attack the major question Santa Fe has raised, and that is: Will this be approved by the Interstate Commerce Commission?” said NatWest Securities Corp. analyst Michael Lloyd.

Union Pacific’s bid is worth $20 a share, about 16% higher than the $17.13 a share that Ft. Worth-based Burlington offered.

Stock of Schaumburg, Ill.-based Santa Fe closed up 12.5 cents at $15.625 on Monday on the New York Stock Exchange, while Union Pacific slipped 25 cents to $48.875 and Burlington Northern was off 75 cents at $49.875.