News Business Sports Entertainment Life Obituaries Opinion
Jobs Homes Cars Classifieds Shopping
Local Bloggers Cheap Tech Eco-Confessions Faceoff Furst Draft Heard on the Street Med City Movie Guy Pulse on Health Political Party

Search PB Blogs

Loading

Categories

« New sandwich shop + downtown Roch. skyway | Main | New eatery on menu for Roch. skyway »

February 07, 2012

Will Canadian Pacific sell DM&E?

It has been long time since DM&E - the one-time nemesis of Mayo Clinic and the City of Rochester - has been in the news.

So I couldn't resist posting this. Evidently, a guy trying to engineer the future of Canadian Pacific railroad thinks buying DM&E was a "blunder" and CP should dump the pathway into the Powder River Basin's treasure chest of coal.

Here's is some from a Bloomberg News article by Frederic Tomesco and Natalie Doss:

300px-DME_locoWilliam Ackman, the investor seeking a management change at Canadian Pacific Railway Ltd., said his proposed chief would consider selling a rail carrier acquired for $1.48 billion in 2008.


Dakota, Minnesota & Eastern Railroad Corp. cost more than it was worth, Ackman said yesterday in an interview after urging Canadian Pacific shareholders to back Hunter Harrison, his choice to be chief executive officer. Ackman's Pershing Square Capital Management LP is Canadian Pacific's biggest investor.

--------------


Ackman cited the DM&E deal as an example of poor decision making that he said would be remedied by ousting CEO Fred Green and hiring Harrison, the retired chief of Canadian National Railway Co.

Calgary-based Canadian Pacific targeted the DM&E to expand access to U.S. Midwest ethanol and coal markets.

---
The railroad agreed to buy Sioux Falls, South Dakota-based DM&E in 2007 and won U.S. approval for the transaction the following year. Before the purchase, closely held DM&E had planned to spend $6 billion on a new line into Wyoming's Powder River Basin, where U.S. carriers Union Pacific Corp. and Burlington Northern Santa Fe load coal from the area's mines.

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

I never quite understood why an organization composed of so many intelligent people like the Mayo got it's undies in such a bind over a couple of coal trains. They pose no danger to the clinic.

On the other hand the half dozen or so ethanol trains that move through town every week, if they were to derail, would cause a large portion of the city to have to evacuate. If the chemicals did happen to leak it's possible people could be injured and even die.

Ackman's been on the war path. It should be no surprise that he's 2nd guessing everything CP's management has done. And maybe CP did pay too much for DME. But they did so for a gateway to Kansas City. The possiblity of access to Power River Basin coal was just a nice cherry on top that they did not have to pay for, only if it ever came about.

The comments to this entry are closed.