Like almost all major corporations, CSX Corp. officials have a policy of not discussing merger rumors under any circumstances.
However, the CEO of one major company who would like to acquire CSX doesn’t mind talking about it at all.
The Wall Street Journal reported last week that Canadian Pacific Railway Ltd. approached Jacksonville-based CSX for the second time in January about a merger, and was rebuffed for a second time.
Usually these stories come from anonymous sources such as investment bankers who might benefit from a merger negotiation. In this case, it was Canadian Pacific CEO Hunter Harrison who confirmed the story for the Journal.
“We’ve said all along that if we looked at the synergies between the two eastern carriers, right now both of them would work for us,” Harrison said, according to the Journal.
Canadian Pacific has been trying to buy the other major eastern railroad, Norfolk Southern Corp., since November. Like CSX, Norfolk Southern has rejected Canadian Pacific’s advances.
All through this process, Harrison has continued to talk about CSX.
During a conference call in December to discuss the bid for Norfolk Southern, Harrison said he understood CSX was “in play” as a potential takeover target.
Last month, at an investor conference hosted by Barclays, Harrison didn’t discuss any merger talks with CSX but did take the opportunity to criticize CSX’s operations.
Harrison said after Oscar Munoz joined CSX in 2003, Munoz invited him to Jacksonville to talk about ways to improve operations, according to a transcript of the investment conference posted by Canadian Pacific.
Harrison said other CSX officials were resistant to his ideas.
“People don’t want change, they don’t want to switch models and there is a resistance to it. And organizations I find that are willing to do that, that are willing to really look in the mirror, see what opportunities there are and then … to take the steps to see if they are right, produce success and others don’t,” he said.
Harrison also said at the conference that CSX CEO Michael Ward “is probably going to be leaving” the company, after Munoz left in September to become CEO of United Continental Holdings Inc.
Actually, when Munoz resigned as president of CSX, Ward said he committed to stay for at least three more years as the company considers a new succession plan. He had been prepared to possibly retire this year and let Munoz take over.
Canadian Pacific originally approached CSX in October 2014 and was rebuffed. Although Ward wouldn’t confirm those talks, Harrison has.
The timing of this second attempt to go after CSX is strange because Canadian Pacific continues in hot pursuit of CSX rival Norfolk Southern.
Canadian Pacific has even been able to get a resolution on the proxy statement for Norfolk Southern’s annual meeting, asking shareholders to vote to request the board of directors “promptly engage in good faith discussions with Canadian Pacific Railway Limited regarding a business combination transaction involving Canadian Pacific and the company.”
The meeting date hasn’t been set.
The news of Canadian Pacific’s renewed interest in CSX sent CSX’s stock up about 5 percent in aftermarket trading Tuesday after the Journal’s story, the newspaper reported.
However, by the time trading reopened Wednesday, investors seemed to realize the unlikelihood of a CSX takeover. CSX’s stock actually ended up down 9 cents to $24.55 at Wednesday’s close.
Fidelity Southern Corp. last week completed its acquisition of American Enterprise Bankshares Inc., a community bank that operated two branches in Jacksonville.
Atlanta-based Fidelity Southern already had five branches in the Jacksonville area and said the deal continues its expansion in the Florida market.
Shareholders of privately-held American Enterprise received Fidelity Southern stock valued at $27.6 million in the deal.
The other pending merger involving a Jacksonville community bank is also nearing completion. Shareholders of Jacksonville Bancorp Inc. are scheduled to vote Friday on a buyout offer from Ameris Bancorp.
Shareholders will receive either 0.5861 shares of Ameris stock or $16.50 in cash for each of their Jacksonville Bancorp shares.
The total value of the deal was put at $96.6 million when it was announced in October.
Ameris is officially headquartered in Moultrie, Ga., but its top executives have moved to offices in the Riverplace Tower on the Southbank and the company has put its name atop the building.
Another Jacksonville community bank, FirstAtlantic Financial Holdings Inc., announced it will begin paying quarterly cash dividends.
The parent company of FirstAtlantic Bank declared a first-quarter dividend of 3 cents a share. The company paid an annual dividend of 10 cents a share last year.
FirstAtlantic’s stock began publicly trading a year ago on OTCQX, the highest of three tiers operated by the OTC Markets Group Inc.
The stock, which trades under the ticker “FFHD,” has risen from $8.50 when it first started trading in March 2015 to slightly below $10 recently.
The company reported earnings rose 42 percent in 2015 to $3.6 million, or 60 cents a share.
FirstAtlantic has about $422 million in assets and eight branches in the Jacksonville area.
Advanced Disposal reports $8.8M loss
Advanced Disposal Services Inc. last week reported a fourth-quarter net loss of $8.8 million.
Operating income rose almost 30 percent to $25 million, but interest costs resulted in a final net loss for the waste services company.
Advanced Disposal, headquartered in Nocatee in St. Johns County, attempted to go public last month, which would have allowed it to reduce debt.
However, the company pulled its initial public offering off the market because of the weak overall stock market.
The company’s revenue fell 1.1 percent in the quarter to $349.6 million.
Publix Super Markets Inc. last week said, based on its latest appraisal, its stock price rose from $41.80 on Nov. 1 to $45.20 on March 1, an 8.1 percent increase.
Over that same period, the Standard & Poor’s 500 index dropped by 4.9 percent.
Of course, Publix’s stock is not publicly traded. It is made available for sale only to employees of the Lakeland-based supermarket chain and the price is determined by appraisal, not by market activity.
However, the stock is performing well for current and former employees, with a dividend of 79 cents a share paid out last year. The company said in its annual report there are about 172,000 stockholders (and 180,000 employees).
Publix also reported fourth quarter earnings rose 15 percent to $521.1 million, or 68 cents a share. Total sales rose 4.5 percent to $8.2 billion and comparable-store sales (sales at stores open for more than one year) rose 3.2 percent.
The St. Joe Co. last week reported a net loss of $2.5 million, or 3 cents a share, for the fourth quarter, and a net loss for the full year of $1.7 million, or 2 cents a share.
The historic real estate development company formerly headquartered in Jacksonville is focusing on projects in the Florida Panhandle region, including a master plan to develop 110,500 acres it owns in Bay and Walton counties.
Medtronic plc’s stock dropped Tuesday after the medical device maker reported revenue below expectations.
Adjusted earnings of $1.06 a share for the third quarter ended Jan. 29, a penny lower than last year, equaled the average forecast of analysts, according to Thomson Financial.
However, revenue of $6.93 billion was lower than the average forecast of $6.99 billion.
Medtronic’s surgical technologies division, which is headquartered in Jacksonville, reported revenue rose 6 percent to $443 million, despite a negative impact from foreign exchange rates on overseas sales.
Excluding the currency impact, the surgical technologies division grew sales by 10 percent in the quarter, the company said.
Medtronic’s stock fell $3.21 to $74.18 Tuesday after the earnings report.
Stein Mart Inc. announced last week that former Jacksonville Jaguars owner Wayne Weaver retired from its board of directors.
Weaver rejoined the board of the Jacksonville-based fashion retailer in 2014 after previously serving as a director from 2000-08.
“Wayne has brought a wealth of knowledge to our company during the two terms that he has served on our board,” Chairman and CEO Jay Stein said in a news release.
Stein Mart appointed Lisa Galanti to replace Weaver. Galanti retired last year as managing director of Fitzgerald & Co., a marketing communications and advertising agency.