TALKING POINT/SANTA FE SOUTHERN <SFX> Santa Fe Southern Pacific Corp may have more difficulty combining its two railroads than fending off a possible takeover by Henley Group <HENG>, which has accumulated almost a five pct stake in the real estate and railroad conglomerate, analysts said. Takeover speculation has surrounded Santa Fe since Henley disclosed its stake in the company earlier this week, but analysts and a Santa Fe official were skeptical a takeover is its intention. Analysts also said the company has strong defenses that would easily deter any suitor - one of those being its problems combining its two railroad properties, which hang in regulatory limbo. Richard Fischer of Merrill Lynch and Co Inc said that Santa Fe at December 31 had 580 mln dlrs in cash and cash equivalents, while its long-term debt to capital was just over 25 pct. "This gives them plenty of borrowing power," he said, which could be used against an unwanted suitor. Henley Group's Chairman Michael Dingman has said he wants to take major positions in undervalued natural resource companies. He also told Reuters in an interview he is seeking an acquisition of from two billion to eight billion dlrs. Santa Fe officials don't appear concerned that Henley might launch a takeover. "I would not characterize the atmosphere around here as one of concern," one Santa Fe executive said about Henley. "I think it's wrong to assume Dingman has formed a firm strategy with Santa Fe," said Mark Hassenberg, who covers Henley for DLJ Securities. Analysts say the potential of Santa Fe's land assets are likely to be realized slowly. They add that Santa Fe's efforts to merge its two railroads remain in regulatory limbo, sidetracking many of its strategic plans for the foreseeable future. These realities, they said, support the Henley Group's statement that its Santa Fe stake is only an investment. The more pressing problem facing Santa Fe is overcoming difficulties in merging its two railroads, the Atchison, Topeka and Santa Fe Railway Co and Southern Pacific Transportation Co. The merger would create the nation's second-longest railroad. Last July the Interstate Commerce Commission (ICC) denied the merger on anticompetitive grounds. The company since has granted trackage-sharing rights to four western railroads to meet the ICC's concerns and persuade it to reopen the hearings in its three-year-old struggle to merge the lines. "My guess is the commission will decide in three to six weeks whether to reopen hearings," Fischer said. "I believe they've made an effort to satisfy the ICC's objections," he said. "But in doing so they haven't pleased everyone. Before they had Burlington Northern on their side, now Burlington is opposed to the way trackage rights are set up." If the hearings are reopened, analysts predicted it will take six to nine months for everyone to have their say, and up to another year for the ICC to decide. Santa Fe is in the midst of a 50-mln-share stock buyback program begun in 1984. It has bought back 33.7 mln shares as of February 1, when it had 154.7 mln shares outstanding, a spokesman said. Among the shares repurchased were two stakes owned by Norfolk Southern, one of 3.4 mln shares bought in 1986 and another of 1.7 mln shares in 1985, one analyst said. James Voytko at Paine Webber believes Santa Fe could fight off the Henley Group with its cash and credit. Citing the share buybacks from Norfolk Southern, he said one of Santa Fe's options, if threatened, could be to buy the Henley stake. "It is indeed possible that Dingman sees this as a low-risk, opportunistic investment," Voytko said. "People who follow Santa Fe have given me values of 45 dlrs to 50 dlrs a share," said DLJ Securities' Hassenberg. "But I'm certain that in Dingman's mind, the company is worth more than that in breakup value."