FEC to settle shareholder challenge to acquisition

FEC to settle shareholder challenge to acquisition    Florida East Coast Industries, parent of the Florida East Coast Railway, said Friday it has reached an agreement in a shareholders' lawsuit related to the company's proposed acquisition.
   FECI said it has entered into a memorandum of understanding for a settlement, based on an agreement to make more information related to the acquisition agreement available to a shareholders' group that filed a class action lawsuit against the company.
   FECI in May agreed to a proposal from the Fortress Investment Group to acquire the company and take it private for $2.2 billion, or $62.50 a share.
   Today's announcement said the agreement would not impact the Fortress deal, nor would it impact a special dividend of $21.50 per share that was also announced today. The acquiring group will pay all legal costs related to the challenge pending court approval of the agreement.
   The company denied all the allegations related to the lawsuit, explaining the disclosures in the settlement would prevent any delays in finalizing the acquisition.
   The FECI acquisition deal, which includes the railroad and the company's real estate arm, came together quickly this spring and some shareholders were unaware a proposed acquisition was being put together by top management and the board of directors.
   Railroads have been a hot item on Wall Street this year, in part because investment guru Warren Buffett has been investing in several Class I railroads.
   The main line in the FEC rail operations runs for 350 miles between Jacksonville and Miami. The railroad handles bulk commodities, intermodal containers and trailers, and a mix of traditional rail freight.