Nathan Bomey

USA TODAY

Corrections and clarifications: An earlier version of the story below included an incorrect stock quote for Norfolk Southern.

Canadian Pacific Railway's bid to acquire fellow rail giant Norfolk Southern came to an end following months of contentious back-and-forth squabbling and amid heightened scrutiny from the Obama administration on antitrust issues.

Canadian Pacific said Monday that it would no longer pursue the takeover, which it had proposed publicly despite Norfolk Southern's repeated rejections. It also withdrew a resolution that would have required Norfolk Southern shareholders to vote on whether to force deal talks.

"No further financial offers or overtures to meet with the NS board of directors are planned at this time," Canadian Pacific said in statement.

Norfolk Southern had repeatedly asserted that a merger would draw intense regulatory scrutiny, saying there's a good chance it would have been rejected. The company also questioned the value of Canadian Pacific's offer and said it could perform well on its own.

Norfolk Southern shares (NSC) fell 2.7% to close Monday at $79.28 and Canadian Pacific shares (CP) rose 3.4% to close at $139.37.

The deal's demise comes as the Obama administration has increased scrutiny of mergers in recent months, including the Treasury Department's scuttling of the proposed Pfizer-Allergan tie-up and the Justice Department's lawsuit to block the oilfield services merger of Halliburton and Baker Hughes.

And late last week, the Justice Department said it opposed a voting-trust structure that Canadian Pacific had proposed to the Surface Transportation Board, which reviews proposed railroad mergers. Under the proposal, Canadian Pacific would have acquired Norfolk Southern, Canadian Pacific's stock would have been placed in trust and its current CEO would have become CEO of Norfolk Southern before an antitrust review could be completed, according to the Justice Department.

“Canadian Pacific’s voting trust proposal would compromise Norfolk Southern’s independence and effectively combine the two railroads prior to completion of the STB’s review,” said Assistant Attorney General Bill Baer of the Justice Department’s antitrust division in an April 8 statement. “That makes no sense. We urge the STB to preserve its ability to review the impact of the proposal on competition and consumers before Canadian Pacific starts scrambling the eggs.”

Norfolk Southern again spurns Canadian Pacific takeover proposal

The prospective deal's demise marks a setback for activist investor and Canadian Railway shareholder Bill Ackman, who publicly pushed for the deal and suggested that "pride" was preventing Norfolk Southern from giving the offer adequate consideration.

Canadian Pacific went so far as to establish a website, CPconsolidation.com, to promote the deal. It was still operational Monday morning.

"We have long recognized that consolidation is necessary for the North American rail industry to meet the demands of a growing economy, but with no clear path to a friendly merger at this time, we will turn all of our focus and energy to serving our customers and creating long-term value for CP shareholders," Canadian Pacific CEO E. Hunter Harrison said.

In its latest publicly revealed offer, Canadian Pacific said it would pay $32.86 in cash and allocate 0.451 shares in the combined company for every share of Norfolk Southern stock, in addition to compensation in the event that investors didn't value the combined company at the rate Canadian Pacific was projecting.

Norfolk Southern, which faced criticism from Canadian Pacific over what CP described as Norfolk Southern's low earnings, said it is "on track" to squeeze out more than $650 million in "productivity savings" by 2020.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.