FILE PHOTO: A CSX freight train travels in Washington, U.S., December 14, 2024. REUTERS/Benoit Tessier/File Photo

By Svea Herbst-Bayliss

NEW YORK (Reuters) -Hedge fund Toms Capital Investment Management has requested to meet with the board at U.S. railroad operator CSX after recently buying a stake, people familiar with the matter said, raising speculation the firm may push for a possible merger.

Toms Capital, run by Ben Pass, invested in the railroad during the second quarter, holding 5.6 million shares of common stock in CSX as of June 30, a new filing showed.

It is unclear exactly what the firm wants but Pass has a history of pushing for mergers at companies like U.S. Steel and the Band-Aid and Tylenol maker, Kenvue.

The hedge fund invested and is reaching out to the company at a time speculation is mounting that fresh railroad mergers are likely after Union Pacific and Norfolk Southern inked a deal last month.

Unlike some activist investors, Toms Capital prefers to stay in the background and push for changes out of the limelight, rather than launching public and noisy campaigns.

A representative for Toms Capital declined to comment. CSX did not immediately respond to a request for comment.

CSX is no stranger to activist investors and previously worked with investor Mantle Ridge, whose founder Paul Hilal, now serves on the CSX board.

Toms is not the only firm to have invested in the railroad during the second quarter. Ancora Holdings also established a toehold investment and has been considering more purchases, a person familiar with the firm's trading patterns said.

A spokesman for Ancora declined to comment.

Ancora has a history of pushing for changes and won board seats last year at rival railroad Norfolk Southern.

Speculation about CSX's future has come into sharper focus in the wake of rival railroad Union Pacific's decision in July to acquire Norfolk Southern in a $71.5 billion deal. The U.S. Surface Transportation Board will still have to sign off on the deal.

Investors have said CSX needs to find a partner of its own now, raising the possibility of potential talks with Berkshire Hathaway-owned BNSF Railway and others.

(Reporting by Svea Herbst-Bayliss. Editing by Dawn Kopecki and Marguerita Choy)