Canadian Pacific (TSE:CP) (NYSE:CP) Tuesday announced that it intends to “explore strategic options” for its 660-mile main line track that spans several midwest states in the U.S.
Shares of the company rose 1.99 per cent on the news as at about 3:20 p.m. EDT, trading at $93.17.
The main line track encompasses CP's current operations between Tracy in Minnesota west into South Dakota, Nebraska and Wyoming. CP took over control of the line when it acquired Dakota, Minnesota & Eastern railroad in 2008.
A number of grain, ethanol, clay and merchandise customers are rail-served in the area.
“This portion of the CP network would be an attractive and highly viable opportunity for a low-cost operator,” said president and CEO Hunter Harrison.
“There is a strong long-term franchise here for an operator willing to maintain high quality service and explore growth opportunities with existing and future customers.”
CP said it will be contacting interested parties in December, 2012.
"CP will continue to fully serve customers along this rail line as we work with interested parties and evaluate proposals,” Harrison said.
“We have undertaken similar reviews on other portions on our network in the past that have resulted in positive outcomes for shippers, employees, and operators.”
Harrison, the former CEO of Canadian National Railway (TSE:CNR), was appointed the company’s CEO in the summer by CP’s new board of directors.