	talking point santa fe southern sfx santa fe southern pacific corp may have more difficulty combining its two railroads than fending off a possible takeover by henley group heng which has accumulated almost a five pct stake in the real estate and railroad conglomerate analysts said takeover speculation has surrounded santa fe since henley disclosed its stake in the company earlier this week but analysts and a santa fe official were skeptical a takeover is its intention analysts also said the company has strong defenses that would easily deter any suitor one of those being its problems combining its two railroad properties which hang in regulatory limbo richard fischer of merrill lynch and co inc said that santa fe at december had mln dlrs in cash and cash equivalents while its long term debt to capital was just over pct this gives them plenty of borrowing power he said which could be used against an unwanted suitor henley group s chairman michael dingman has said he wants to take major positions in undervalued natural resource companies he also told reuters in an interview he is seeking an uisition of from two billion to eight billion dlrs santa fe officials don t appear concerned that henley might launch a takeover i would not characterize the atmosphere around here as one of concern one santa fe executive said about henley i think it s wrong to assume dingman has formed a firm strategy with santa fe said mark hassenberg who covers henley for dlj securities analysts say the potential of santa fe s land assets are likely to be realized slowly they add that santa fe s efforts to merge its two railroads remain in regulatory limbo sidetracking many of its strategic plans for the foreseeable future these realities they said support the henley group s statement that its santa fe stake is only an investment the more pressing problem facing santa fe is overcoming difficulties in merging its two railroads the atchison topeka and santa fe railway co and southern pacific transportation co the merger would create the nation s second longest railroad last july the interstate commerce commission icc denied the merger on anticompetitive grounds the company since has granted trackage sharing rights to four western railroads to meet the icc s concerns and persuade it to reopen the hearings in its three year old struggle to merge the lines my guess is the commission will decide in three to six weeks whether to reopen hearings fischer said i believe they ve made an effort to satisfy the icc s objections he said but in doing so they haven t pleased everyone before they had burlington northern on their side now burlington is opposed to the way trackage rights are set up if the hearings are reopened analysts predicted it will take six to nine months for everyone to have their say and up to another year for the icc to decide santa fe is in the midst of a mln share stock buyback program begun in it has bought back mln shares as of february when it had mln shares outstanding a spokesman said among the shares repurchased were two stakes owned by norfolk southern one of mln shares bought in and another of mln shares in one analyst said james voytko at paine webber believes santa fe could fight off the henley group with its cash and credit citing the share buybacks from norfolk southern he said one of santa fe s options if threatened could be to buy the henley stake it is indeed possible that dingman sees this as a low risk opportunistic investment voytko said people who follow santa fe have given me values of dlrs to dlrs a share said dlj securities hassenberg but i m certain that in dingman s mind the company is worth more than that in breakup value reuter 
