Conrail Ordered to Hold Shareholder Vote

A federal judge ordered Conrail Inc. to proceed with a Dec. 23 shareholder vote the railroad had said would be postponed if it appeared unlikely to approve a key plank in a proposed $8.5-billion merger with CSX Corp. U.S. District Judge Donald Van Artsdalen said it would be unfair to shareholders for Conrail to convene a company meeting for the vote only if the firm was assured of winning. Van Artsdalen was ruling on a request by Norfolk Southern Corp., which has made a $10-billion cash bid for Conrail, to block Conrail from postponing next week’s meeting. Shareholders are to vote on whether to waive a Pennsylvania state law that in effect requires CSX to pay all cash for Conrail. CSX has offered 40% cash and 60% stock. Conrail expressed regret at the ruling and said it had not decided whether to appeal. Conrail stock rose $1.75 to close at $98.125 on the New York Stock Exchange.