Report: Activist investor Ancora pressures CSX to explore merger options

Editor's note: This story has been updated to include a link to the Ancora letter to the CSX board. Ancora made the letter public yesterday.

Activist investor Ancora Holdings is urging CSX's board to commit to exploring multiple merger options or replace President and CEO Joe Hinrichs if it doesn't, the Wall Street Journal reported yesterday.

In a letter reviewed and reported by the newspaper, Ancora said it is prepared to pursue a proxy fight for CSX board seats if it doesn't follow the hedge fund's advice. Ancora's pressure on CSX comes just weeks after Union Pacific Railroad and Norfolk Southern Railways announced their proposed merger, which would create the first transcontinental railroad operator in the United States.

Meanwhile, the news service Reuters reported yesterday that hedge fund Toms Capital Investment Management requested to meet with CSX's board after recently buying a stake in CSX, raising speculation the firm may push for a possible merger. 

Since UP and NS announced their proposed combination earlier this month, speculation about the future of CSX has surfaced, including whether it might merge with another Class I.

Yesterday, CSX Director of Media Relations Austin Staton said the company welcomes opportunities to boost value for its shareholders.

"CSX appreciates the input of its shareholders and engages regularly with them as it executes on its goals to drive value through profitable growth and industry leading customer service," Staton said in an email.