An offer will be made by the Southern Railway to purchase, through a stock exchange, up to 80 per cent of the outstanding stock of the Tennessee, Alabama and Georgia Railway, W. Graham Clayton Jr., president of the Southern, and Garrison Siskin, chairman of the board of TAG, announced Tuesday.
The plan calls for exchanging .3 of a share of Southern Railway no-par common stock for each share of par $2.50 TAG common stock.
Southern's offer will be made to TAG stockholders in the near future and unless extended by Southern, the offer will expire October 20. The offer stipulates that at least 80 per cent of the 294,086 outstanding shares of TAG stock must be offered for the exchange to become effective.
The offer is also subject to approval by the Interstate Commerce Commission and the issuance by the Internal Revenue Service of a tax ruling acceptable to both Southern and TAG.
A financial report released in March of this year showed TAG had a net income of $328,472.68 on operating revenues of $1,972,991.83. The income figure was an 18.4 per cent increase over 1967 and set an all-time record for the 81-year-old line which operates between Chattanooga and Gadsden, Alabama.
TAG shareholders' equity at the end of 1968 was $3,755,625, an increase of more than $400,000 over 1967. Dividends paid by TAG in 1968 totaled 65 cents a share. The railway paid a 35 cents a share dividend on June 27 of this year. From 1959 through last December 31, the company has distributed a total of $1,098,509 to stockholders.
The Southern Railway had a net income of $42,955,000 on operating revenues of $517,579,000 in 1968. The company operates over 10,178 miles of rail line, including subsidiary companies, between Washington, D.C., and New Orleans and as far west as St. Louis. The company last year paid $23,035,000 in dividends on the 9,664,132 shares of preferred and common stock.
Chattanooga News Free Press, 12/8/1970
The Interstate Commerce Commission, in an order served today, authorized Southern Railway Co. to acquire stock control of the Tennessee, Alabama & Georgia Railway Co. through an exchange of shares, it was announced jointly by W. Graham Clayton Jr., president of Southern Railway, and Garrison Siskin, chairman of TAG Railway.
In the transaction .3 of a share of Southern Railway no par common stock will be exchanged for each share of TAG common tendered to Southern. To date over 99.99 per cent of the TAG shares have been tendered and placed in escrow pending the closing of the share exchange. Southern and TAG have scheduled Jan. 1, 1971, as the closing date.
The TAG line runs between Chattanooga and Gadsden, Ala. a distance of some 92 miles and, after the assumption of control, will be operated as a subsidiary of Southern Railway. Mr. Siskin will continue as chairman of TAG and will participate in TAG management.
Tax rulings sought from Internal Revenue Service have been obtained. Letters will be sent promptly to TAG shareholders and voting trust certificate holders concerning the exchange.
Last updated 6/1/2000
