Union Pacific Corp., once considered a long-shot spoiler in a bidding war to buy Santa Fe Pacific Corp., has emerged as the likely winner.
Union Pacific won a crucial agreement yesterday from Santa Fe officials to meet for the first time to share financial information and discuss terms of a merger of the railroad companies.
Santa Fe had been resisting such a meeting, saying that a lower offer of $3 billion from Burlington Northern Inc. was more attractive because it stood a better chance of being approved by federal regulators than Union Pacific's $3.2 billion offer.
But yesterday Santa Fe said it would meet with Union Pacific's advisers "in an effort to clarify and improve Union Pacific's offer."
"In essence, Union Pacific has won," said James M. Higgins, an analyst at Brown Bros. Harriman.
He said that unless Burlington Northern raises its bid or a glitch emerges in the talks with Santa Fe, Union Pacific appears to have taken care of many of the main objections to its offer.
"This is a railroad that is trying very hard to answer the skeptics," Mr. Higgins said.
After Union Pacific made a surprise bid in October, some analysts did not give it much hope. Many said such a merger probably would not be approved by federal regulators because the heavy overlap of routes between the two railroads would raise too many anti-competitive concerns.
Many analysts have been saying that Union Pacific was just trying to break up a Santa Fe-Burlington Northern combination, which, if approved, would have surpassed Union Pacific as the largest railroad in the country.
But the Interstate Commerce Commission gave informal approval Monday for Union Pacific to establish a voting trust, a crucial strategy intended to shift the uncertainty of the federal approval process from Santa Fe shareholders to Union Pacific.
The takeover effort is by no means over.
Santa Fe, for instance, said yesterday that it wanted Union Pacific to improve its offer. Santa Fe officials have previously said that Union Pacific executives had made statements about a possible $20-a-share offer.
Burlington Northern officials declined to comment yesterday, but last week they said they would "stand pat" on their offer.
Santa Fe, based in Schaumburg, Ill., said yesterday that it was postponing a shareholder vote on Burlington Northern's offer by two weeks, to Dec. 16.
Santa Fe said it wanted to give its board and stockholders more time to consider alternatives to the offer.