Santa Fe Pacific Considering Takeover Offer : Railroads: Board urges shareholders not to ‘act hastily’ pending a decision on Union Pacific’s bid.

Santa Fe Pacific Corp. is considering the latest takeover offer from Union Pacific and asked its shareholders Friday to wait for a decision before turning over their stock.

The deliberations of the board of directors are in stark contrast to Santa Fe’s decision to reject Union Pacific’s first offer the day after it was made.

The latest Union Pacific offer, made Tuesday, may give the board something to think about. By setting up a trust for the Santa Fe stock, which could be sold if antitrust regulators nix the merger, Union Pacific is absorbing much of the risk of the deal’s falling through.

In earlier letters to Union Pacific executives, Santa Fe Chairman Robert Krebs said the board will give serious consideration to an offer at a fair price and with a provision for a trust. Union Pacific says its latest proposal does just that.

“Your board of directors is evaluating the Union Pacific proposal and will advise Santa Fe shareholders of its conclusions shortly,” Krebs said in Friday’s letter to stockholders. “In the meantime, you are strongly urged not to act hastily with respect to your investment in Santa Fe.”

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Spokeswoman Philippa Dworkin said from Santa Fe’s Schaumburg, Ill., headquarters that the company will not comment further. She said she had no information on when the board will meet.

In a week, Santa Fe shareholders are due to vote on a proposed merger with Ft. Worth-based Burlington Northern, which is offering less than $16.50 per-share worth of its own stock for Santa Fe.

Union Pacific, based in Bethlehem, Pa., on Tuesday revised its bid for Santa Fe to $3.3 billion. It now is offering $17.50 in cash per share for 57% of Santa Fe and would pay for the rest of the company with its own stock.

Union Pacific, the nation’s No. 1 railroad in terms of revenue, is trying to stop No. 2 Burlington Northern from getting Santa Fe’s tracks from Chicago to Southern California.

Santa Fe, the nation’s seventh-largest railroad, and Burlington Northern have argued that the Interstate Commerce Commission would not approve a Santa Fe merger with Union Pacific on anti-competitive grounds.

Santa Fe now has no choice but to consider Union Pacific’s offer since it meets the criteria Santa Fe set forth to negotiate, said Susan Chapman, an industry analyst with Forbes, Walsh and Kelly in New York.