Canadian Pacific Railway upped its bid to buy U.S. railroad operator Norfolk Southern Corp less than a week after its prior $28.4 billion proposal was rejected, but the new offer was promptly rejected again. Calgary-based CP said it is offering $32.86 in cash and 0.451 of a share in a new holding company that would own both Norfolk Southern and Canadian Pacific. To alleviate regulatory concerns, CP said it was prepared to close the transaction using a voting trust. “If you cannot get a trust approved then they should have just written a law that said there’s no more mergers,” CP chief executive Hunter Harrison told analysts. CP’s latest proposal was rejected by Norfolk, which said Monday the merger was unlikely to win approval from U.S. regulators, citing the opinion of two former Surface Transportation Board commissioners. “Canadian Pacific’s revised, reduced proposal is not only less than what the Norfolk Southern board has already found to be grossly inadequate, it is even more uncertain and risky given the decrease in the cash consideration,” Norfolk Chief Executive James Squires said Tuesday in a statement. U.S. regulators have long been skeptical about rail mergers. Canadian National Railway’s bid to buy Burlington Northern Santa Fe was blocked by authorities in 1999-2000. The new holding company would be listed both on the New York and Toronto stock exchanges, CP said. To ensure against any unlawful control violation, CP said an independent trustee would be appointed to oversee CP or Norfolk while in trust. While in trust, Harrison would sever all ties with CP and become CEO of Norfolk, with his No. 2 Keith Creel taking the helm at CP. Harrison has built a reputation as a turnaround expert in the rail industry and has dramatically improved CP’s metrics since taking over. CP said even if regulators ultimately decide that a merger will not be permitted, operational improvements will materially increased the value of Norfolk. Bill Ackman, head of key CP shareholder Pershing Square Management LP, told analysts the only downside of the merger being rejected are legal fees. “The upside, if this transaction is approved, is enormous,” he said. “We view this announcement positively as it demonstrates CP’s strong commitment to pursuing the acquisition,” Desjardins analyst Benoit Poirier said in a note to clients.