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BUSINESS A25
Thursday 19 November 2015
Target profit climbs Regulators say Barclays to pay $150M, fire executive
as customer traffic
increases over 3Q ALBANY, New York (AP) — conduct concerns Bar- instances to automatical- internal systems and con-
New York regulators say clays’ “Last Look” system, ly reject client orders that trol failures, and the pen-
MINNEAPOLIS (AP) — Tar- the British bank Barclays and the bank is termi- would be unprofitable for alty will be reflected in its
get says its sales rose 1.9 will pay a $150 million pen- nating its global head of the bank because of sub- fourth-quarter results.
percent at established lo- alty and fire an executive electronic fixed income, sequent price swings dur- In May, the bank settled
cations in the third quar- for misconduct related to currencies, and commod- ing milliseconds-long hold an enforcement case re-
ter as it worked to revive its automated electronic ities automated flow trad- periods. lated to spot foreign ex-
its business by strengthen- foreign exchange trading. ing. Barclays says the settle- change trading for $2.4
ing flagship categories like The Department of Finan- Regulators say Barclays ment concerns trading billion with U.S. and New
clothing and children’s cial Services says the mis- used the system in certain in 2009-2014 primarily for York authorities.q
products.
Still, the uptick was a slow- Canadian Pacific defends bid for Norfolk Southern railroad
down from the previous
quarter, when sales rose TOM MURPHY Canadian Pacific Railway CEO Hunter Harrison speaks at the company’s annual meeting in
2.4 percent at established JOSH FUNK
locations. Growth of digi- AP Business Writers Calgary, Alberta. Canadian Pacific offered more details and defended its offer to join two of
tal sales also slowed to Canadian Pacific offered
20 percent, and fell short more details and de- North America’s biggest railroads. (Larry MacDougal/The Canadian Press/AP)
of the company’s expec- fended its offer to join two
tations. Previously, Tar- of North America’s big- Eastern United States, CSX to explain the advantages portation Board.
get had forecast digital gest railroads, but Norfolk railroad. Those talks ended of going it alone. There have been no ma-
growth of 30 percent for Southern offered only a abruptly after a failure to Shares of the Norfolk, Vir- jor railroad mergers since
the period. lukewarm response and agree on a number of is- ginia, company closed regulators imposed tough
Its shares fell almost 5 per- regulators have expressed sues. at $86.97 on Tuesday and restrictions 2001. In addition
cent by midday Wednes- significant concerns about Railroads are under pres- have climbed nearly 9 per- to blocking any deal that
day. any rail mergers. sure due to flagging de- cent since media reports reduces competition, rail-
Looking ahead to the Norfolk Southern said the mand for coal with ex- of a possible deal surfaced roads must come up with
critical holiday shopping offer of $46.72 cash and ports weak and U.S. utilities earlier this month. The stock a plan to minimize service
season, Target CEO Brain 0.348 shares in the com- switching to natural gas. jumped more than 6 per- disruptions.
Cornell also said the com- bined company repre- Norfolk Southern’s coal rev- cent Wednesday. Stifel Nicolaus analyst John
pany is confident about its sented a premium of less enue dropped 23 percent Canadian Pacific estimates Larkin said Canadian Pa-
plans and the Minneap- than 10 percent of its stock to $482 million during the that by the time a formal cific has proposed an in-
olis-based company ex- price on Tuesday. Cana- third quarter. The company offer is announced in late novative approach to
pects sales to climb 1 to 2 dian Pacific said that the has taken roughly 300 miles March, the total value of preserving competition by
percent for the final three offer could deliver nearly of track primarily used for the cash-stock deal will be allowing shippers to use an-
months of the year. The 60 percent premium, but it coal out of service over the $126.18, based on the fu- other railroad on the com-
company lifted the low based its calculation on an past 18 months in response ture value of this combined bined Canadian Pacific-
end of its earnings outlook estimate of what the com- to the lower volume. company. That represents Norfolk Southern network if
for the year. bined railroads might be Citi analyst Christian Weth- a 59 percent premium to the shipper didn’t believe
A day earlier, Wal-Mart worth next March. erbee said if Canadian Pa- a 45-day average closing it was receiving adequate
reported stronger-than- It’s clear the two railroads cific is willing to increase its price for Norfolk Southern’s service.
expected sales for its third haven’t agreed on the offer a bit, it might be able stock before the deal re- But Larkin said the deal
quarter and said it ex- value of their operations to persuade Norfolk South- ports surfaced. would need support from
pected an uptick in sales or the likelihood that such ern shareholders to support Norfolk Southern share- other railroads and ma-
for the holidays. Moody’s a merger would be ap- a merger. holders would hold a 41 jor shippers, and if it were
vice president Charlie proved. Canadian Pacific “While NS’s response was percent stake in the new approved, the deal could
O’Shea noted profit mar- spokesman Martin Cej cool, we believe this offer company. trigger a rash of rail merg-
gins for retailers could be said his company has only to be a starting point as op- Even if Norfolk Southern ers that would likely disrupt
affected during the holi- made an offer to talk with posed to an ending point,” backs a merger, it will face traffic. Shares of other ma-
days as retailers rely on Norfolk Southern about a Wetherbee said. Norfolk a challenging review from jor railroads rose sharply
heavy promotions to draw deal, not a formal bid. Southern will face pressure the federal Surface Trans- Wednesday.q
customers. “This is not a quick-and-
Target Corp. was once dirty takeover,” Cej said.
the discount industry’s “It is one that assumes the
darling by pioneering the shareholders of Norfolk
idea of trendy fashions for Southern would want to
affordable prices. But the take part in the combined
company lost customers growth of the company in
during the recession af- the future.”
ter focusing too much on Canadian Pacific said that
expanding everyday gro- combined, the railroads
cery items like milk. Cornell would be more efficient,
took over as CEO last year. reap tax savings and cre-
For the three months end- ate a transcontinental net-
ed Oct. 31, Target said work linking major North
its sales were drive by American industrial cen-
strength in signature cat- ters, cities and ports.
egories including style, This offer comes a year af-
baby, kids and wellness. ter Canadian Pacific dis-
Profit rose to $549 million, cussed a possible merger
or 87 cents per share in the with Norfolk Southern’s
period.q main competitor in the
