Citibank warns aggressive investors: CSX Corporation (CSX.US) has become the focus of a multi-party game of pressure for acquisitions, which could backfire.

The radical investment firm Ancora Holdings recently sent an open letter to the US railroad operator CSX Corporation (CSX.US) urging it to strengthen its market competitiveness through mergers and acquisitions. However, this move was deemed "too aggressive" by analysts at Citigroup and may backfire. According to Citigroup analyst Ariel Rosa's report, if Ancora forcefully pushes CSX Corporation to sell assets or reach a deal, it could weaken the company's current negotiating position, and they recommend "patiently waiting for a more prudent approach". In the letter disclosed on Tuesday, Ancora explicitly requested CSX Corporation to explore the possibility of merging with Berkshire Hathaway's BNSF Railway or Canada's The Pacific Railway (CP.US) and has hired an investment bank to initiate the related processes. If the goal is not achieved, the firm threatens to initiate a proxy battle to restructure the board of directors, with the ultimate goal of removing the current CEO, Jim Foote. It is worth noting that this pressure comes at a crucial point in time for CSX as the company has shown signs of improvement in addressing its service issues, which had attracted attention earlier this year. Rosa pointed out in the analysis that Ancora's aggressive stance lacks a reasonable basis, and the timing of their actions is confusing. The core logic behind their approach is that in the industry landscape that emerged after the merger of Union Pacific (UNP.US) and Norfolk Southern (NSC.US), CSX Corporation needs to maintain its competitiveness through external partnerships. However, using aggressive tactics may undermine the company's strategic autonomy. Meanwhile, another radical investment firm, Toms Capital, recently acquired $5.6 million worth of CSX Corporation shares and has applied to meet with the management. This move indicates that the capital market's expectations for consolidation in the railroad industry are increasing, and as a major eastern US railroad operator, CSX Corporation is becoming the focus of multiple forces' strategic maneuvering. As of now, CSX Corporation has not publicly responded to Ancora's demands, and the market will closely monitor their subsequent strategic adjustments.