CSX (CSX) is under pressure from activist investor Ancora into pursuing a potential merger with a rival, similar to the one entered into by competitors Union Pacific (UNP) and Norfolk Southern (NSC), the Wall Street Journal reported Tuesday, citing a letter from the hedge fund.

Ancora is pushing the railroad company towards a merger with Berkshire Hathaway-owned (BRK.A, BRK.B) BNSF Railway or Canadian Pacific Kansas City (CP), or replace its CEO if it doesn't, according to the report.

Ancora said in the letter it is prepared to launch a proxy fight for board seats later in the year if its advice is not heeded, the Journal reported. Ancora also said it is concerned the railroad operator will be at a disadvantage if it doesn't gain scale through a deal and that inaction risks undermining the company's long-term value, according to the report.

Hedge fund Toms Capital Investment Management also requested a meeting with the railroad company's board after acquiring a stake, Reuters reported, citing sources familiar with the matter.

Toms Capital bought CSX stock in Q2 and currently holds 5.6 million shares, according to a filing cited by Reuters.

CSX, Ancora, and Toms Capital did not immediately reply to requests for comment from MT Newswires.

CSX shares were up 1.1% in recent afternoon trading.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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