Wall Street New York New York USA - Shares of CSX surged 10 percent Monday following a report that the rail operator was being courted for a merger deal by Canadian Pacific Railway.
 
The merger proposal, made and rebuffed by Florida-based CSX in the past week, would combine two of the world's largest railroad operators.
 
Word of the offer was reported Sunday by The Wall Street Journal.
 
The US$62 billion deal would easily eclipse the US$26 billion purchase of Burlington Northern Sante Fe railroad by Berkshire Hathaway in 2010.
 
CSX is up US$2.92 to US$32.87 in late morning trading. Canadian Pacific shares gained US$1.50 to US$190.87.
 
If a deal is forged, the companies would have a combined market value of US$62 billion though regulatory obstacles stand in the way, according to the Journal report, which cited unnamed people familiar with the matter.
 
Hedge fund Pershing Square Capital Management, run by Bill Ackman, holds a nearly 10 percent stake in Canadian Pacific.
 
Both rail operators declined comment.
 
Canadian Pacific spokesman Marty Cej said that the Calgary-based company is "upbeat about the future" but that company policy is not to comment on "speculation and rumors."
 
CSX spokeswoman Melanie Cost said CSX has a "longstanding policy of not commenting on such rumors".
 
Florida-based CSX is the USA's third-largest rail company.
 
Canadian Pacific is Canada's second-largest rail operator.
 
Merger and Acquisition activity has been rampant so far this year, although the rail industry, enjoying a boom due to increasing oil-sector shipments, is rarely hit by hostile takeovers due to regulatory concerns.
 
The U.S. Surface Transportation Board, which oversees railroads, has a history of intervening between deals in the industry, according to the Journal.
 
In 2000, a proposed merger of Burlington Northern and Canadian National Railway, Canadian Pacific Railway's larger rival, was dropped because of the agency's disapproval.

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