Banks were jostling Tuesday to get aboard the latest multibillion- dollar consolidation loan to the railroad sector.

CSX Corp. announced a plan to acquire Conrail Inc. for $8.4 billion in a deal that is expected to require a $4 billion bank loan.

Chase Manhattan Corp., BankAmerica Corp., Citicorp, and NationsBank Corp., which already have strong lending ties to the Richmond, Va., rail company, are said to have the inside track to lead the deal.

But analysts said the picture could grow more complicated - and more lucrative for banks - if a bidding war develops for Philadelphia-based Conrail's attractive northeastern track system.

With Norfolk Southern Corp. widely expected to enter a competing bid, the pressure is on CSX to nail down its financing soon.

The situation is reminiscent of the battle for Santa Fe Pacific Railroad, which was bought by Burlington Northern after a bank-financed bidding war with Union Pacific Corp.

Norfolk Southern, a $10.9 billion-asset rail company that serves the southeastern and midwestern United States, said CSX's deal would have "very significant implications for the nation's transportation system."

It said in a statement that it would act "responsibly and aggressively to protect the interests of the shipping industry and its shareholders," but officials declined to say whether a bid for Conrail was in the works.

Norfolk Southern, which has not arranged a major bank financing in recent years, according to Loan Pricing Corp., also declined to comment on its lending relationships.

An acquisition of Conrail would make CSX the biggest railroad in America, surpassing Union Pacific, whose acquisition of Southern Pacific was completed this month.

Bankers and analysts said the merger would initially provide $500 million in savings.

"This merger makes a lot of sense," said Charles Vincent, a railroad analyst at PNC Investor Services. "It provides opportunities for operating efficiencies, single-line service. Both companies have excellent credit, good cash flow, and strong earnings."

One banker predicted that CSX would slice the financing pie in many pieces in an attempt to keep all its banks happy.

"The railroads are very relationship-oriented," he said. "They know that it's important to be diplomatic with their long-term mutual relationships."

"This is a very good group of banks, and everyone is anxious to get in on the financing," the banker said.

"Conrail has more or less of a monopoly on the northeast quadrant of the country," added Cornelius V. Sewell, an analyst at Argus Research. "They provide a good extension for anyone."

Though government approval could take up to a year, banks and the railroad alike are moving swiftly on financing, with terms expected to be announced within the next few days.

Though CSX will ultimately make a cash offer for 40% of Conrail's stock, the first tender offer will be for 19.9%, due to a Pennsylvania law that restricts ownership of local companies by out-of-state companies.

Stockholders are expected to vote to opt out of the statute, at which time the tender will be increased. Stock is to be exchanged for the remaining 60% of Conrail's shares.

Under the planned offer, Conrail shareholders would get $92.50 a share, a 30% premium over the stock's price at the close of trading Monday.

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