Norfolk Loses Bid to Block Conrail Pact

The federal Surface Transportation Board upheld Conrail’s agreement with preferred partner CSX Corp. to restrict Conrail from considering other merger proposals for two years. Hostile bidder Norfolk Southern Corp. wanted to block the lockout provision, arguing it amounted to an “unlawful control by one railroad over another.” The board, a regulatory agency that oversees rail merger issues, rejected Norfolk’s argument that Conrail shareholders might be coerced to support the CSX deal in a key vote next week if they believe it is the only choice left to them. Richmond, Va.-based CSX expects to submit its $102-a-share merger proposal for Philadelphia-based rail Conrail to the board by March 1, and Norfolk, Va.-based Norfolk expects to submit its bid of $115 a share to the board by May 1.