Norfolk Southern's Stock Surges After Canadian Pacific Confirms Buyout Proposal

Shares of Norfolk Southern Corp. surged 6.5% in after-hours trade Tuesday, after Canadian Pacific Railway Ltd. said a proposal to buy the railroad company. That confirmed a report in The Wall Street Journal last week, which said Canadian Pacific's merger proposal was met with a chilly reception, citing a person familiar with the matter. Canadian Pacific said Tuesday that its proposal includes a "sizable premium in cash and stock," and would result in a company with potential for earnings growth that is faster than either company could achieve on their own. At Tuesday's closing price of $86.97 for Norfolk's stock, the company had a market capitalization of $25.97 billion, according to FactSet. The stock has climbed 5.9% over the past three months through Tuesday, but was still down 21% year to date, while the S&P 500 has slipped 0.4% this year.