Union Pacific Corp. offered yesterday to acquire Santa Fe Pacific Corp. for $3.4 billion, in a move that could scuttle the previously announced merger of Santa Fe and Burlington Northern Inc.
Because of the overlap of Union Pacific and Santa Fe on many routes, the surprising offer by Union Pacific is expected to raise antitrust problems that could block its approval.
Thus, industry analysts said, Union Pacific may be playing the role of the spoiler to the proposed Santa Fe-Burlington Northern merger, which would have displaced Union Pacific as the nation's largest railroad.
"This is a hand grenade of a bid," said Scott Flower, a transportation analyst at Kidder, Peabody.
Union Pacific is offering Santa Fe shareholders a stock swap that it values at $18 a share. That bid exceeds the one made in late June by Burlington Northern, which offered a stock swap valued at $2.7 billion.
Union Pacific announced its bid a few hours after the stock market closed yesterday. Earlier, Santa Fe's shares ended at $12.625, down 37.5 cents. Shares of Union Pacific and Burlington also closed slightly lower.
Union Pacific denied that it was simply trying to scuttle the Santa Fe-Burlington Northern deal. "This is a serious offer," Gary Schuster, a spokesman for Union Pacific, said.
He noted that Union Pacific's offer was much more in line with premiums paid in previous railroad acquisitions. "The bid Burlington Northern made for Santa Fe was the 1994 version of the Great Train Robbery," Mr. Schuster said.
Santa Fe officials had no immediate comment.