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Kansas City Southern Makes Offer for Santa Fe RR

November 24, 1987 GMT

CHICAGO (AP) _ Five formal bids, ranging from $900 million to more than $1 billion, are on the table for a takeover of Southern Pacific Transportation Co. a company official said.

Kansas City Southern Industries Inc. confirmed Monday it had made the latest offer to acquire the railroad. Kansas City Southern declined to detail its bid, which was submitted to Santa Fe Southern Pacific Corp., the Chicago- based holding company that owns Southern Pacific.

The proposal represents careful evaluation of the railroad and ″the strategic benefits that will result from the combination of the Southern Pacific and the Kansas City Southern railroads,″ said Landon H. Rowland, president and chief executive officer of Kansas City Southern.

The acquisition would give Southern a 15,000-mile rail network in the southeast United States, Rowland said.

Robert Gehrt, a Santa Fe spokesman, said other bidders who have made their intentions public include the Railway Labor Executives Association, the Denver & Rio Grande Western Railroad, Guilford Transportation Industries and a Southern Pacific management group.

Santa Fe does not expect to receive any additional offers, Gehrt said.

Rowland said he was confident the proposed acquisition by Kansas City Southern would be approved by the Interstate Commerce Commission.

The ICC earlier rejected as anticompetitive a bid by Santa Fe Southern Pacific to merge the Santa Fe and Southern Pacific rail lines.

Kansas City Southern Industries has $500 million in annual revenues and operates businesses in transportation, financial services, real estate and natural resources, pharmaceuticals and health care data services.