12 Firms Left in Bid to Handle Sale of Conrail

WASHINGTON — The Transportation Department on Wednesday narrowed to 12 the bidders under consideration for handling the $1.7-billion sale of Conrail, the government-owned freight railroad that is to be sold in a public stock offering next year.

The department is scheduled later this month to select four to six brokerage firms as co-managers of the Conrail sale, which could earn the companies commissions as high as $80 million.

Twenty-five investment companies had filed bids to handle the sale.

Among the 12 companies still under consideration are Morgan Stanley & Co., which led an attempt to develop a private stock offering of Conrail when efforts were under way to sell the railroad to Norfolk Southern Corp., and Goldman, Sachs & Co., which served as the Transportation Department’s adviser on the Norfolk Southern proposal.

According to the Transportation Department, the other firms remaining in the competition are: Bear, Stearns & Co., Dean Witter Reynolds, E. F. Hutton, First Boston Corp., Lazard Freres Co., Merrill Lynch, Paine Webber, Prudential-Bache Securities, Salomon Bros. and Shearson Lehman Bros.

The four to six investment companies finally selected are to manage the Conrail sale jointly and share commissions equally, though one company will be chosen to coordinate the sale, officials said.

Congress in the final days of its session approved the sale of the government’s 85% interest in Conrail for what it hopes will be $1.7 billion.