Who Will Buy Florida East Coast Railway???


As we recently reported, Fortress Investment Group LLC is considering a sale of Florida East Coast Railway (FECR). As well as having been completely modernized (motive power, etc), the roadbed has been upgraded to accomodate Brightline passenger trains (still owned by Fortress).

Candidates I have heard about are CSX, NS and Genesee & Wyoming. CSX owns trackage that competes against Florida East Coast, but it is not as high quality as FECR. NS owns nothing South of Jacksonville (Northern terminus of FEC). Genesee & Wyoming is not a participant in the Florida race.

FECR has exclusive access to the top two container seaports in the state of Florida, perceived competitive advantages may block any deal for Class I’s.

Fortress has an investment valued at around $3.5 billion. But the sale of FECR does not include real estate, logistics and telecommunications assets. It is unclear as to the portion of valuation specifically tied to FECR.

My idea: CSX buys FECR and sells much of it’s existing property (Jacksonville to Miami) to G&W or another large regional/short line company.

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