CP Rail bids for CN's eastern lines. (CN North America)

Canadian railroads continue moves toward combination of their money-losing eastern networks.

The mating dance between Canada' s two major railroads a took a new tum when CP Rail offered C$1.4 billion for CN North America's railway operations east of Winnipeg and Chicago.

CN's initial reaction was noncommittal to the offer, which followed months of discussions about a possible merger of the railroads' money-losing eastern networks.

Paul Tellier, president and chief executive officer of CN, said the offer would he reviewed "to ensure that our shareholder, the government of Canada, receives full value and that the interest of our customers are enhanced."

Tellier said, meanwhile, that he welcomes a decision by Canadian Transport Minister Douglas Young to establish a parliamentary task force to study privatization of CN.

"The option of …