Canadian Pacific Railway Ltd. (CP - Get Report) said Monday its approach of CSX Corp. (CSX - Get Report) about a potential deal is over, but hinted that its search for a partner has just begun.

Calgary-based Canadian Pacific, which has undergone a makeover under the guidance of activist Bill Ackman, in a statement confirmed reports that it had held "exploratory conversations" with U.S. rival CSX, but said that those talks have ended and no further discussions are planned.

Yet the company is clearly not giving up on the idea of consolidation.

Canadian Pacific in its statement said that an integrated coast-to-coast railroad "would improve customer service, promote competition, alleviate congestion ... and generate significant shareholder value."

Canadian Pacific CEO Hunter Harrison, installed by Ackman after a fight with the company's board, will host a conference call with investors and media representatives on Tuesday to discuss railroad M&A and the need for a comprehensive North American transportation policy.

A wave of consolidation has left the U.S. with just four Class I railroads, and has effectively ended large-scale M&A talk in the U.S. industry.

CSX CEO Michael Ward, speaking with analysts last week, did not address Canadian Pacific specifically but warned that further consolidation of the railroads could lead to service disruptions and would attract significant scrutiny from customers and regulators.

Canadian Pacific seemingly is hoping that by adding Canada's two Class I railroads to the conversation, deals could be allowed. Analysts noted there would be little geographic overlap between the two companies.

Canadian Pacific said that "given the right structure between the right players, and having thoughtful considerations and remedies to address shipper concerns, regulatory approvals are achievable."

Further the company said that it believes shipper concerns will only worsen over time if the industry is not allowed to form nationwide rail systems that can theoretically be run more efficiently.

But Canadian Pacific will likely face a steep climb in trying to convince analysts that it could win regulatory approval.

Cowen & Co. analyst Jason H. Seidl in a note Monday said, "It is hard to imagine that the regulators, who have been listening intently to shippers' worries about rail service and pricing issues, would give their blessings on a deal that could exacerbate service challenges, at least in the near term, and further boost the railroads' pricing power."

Seidl also said that if Canadian Pacific is unable to buy CSX, it could seek out other ways to streamline its Chicago operation, including a smaller asset purchase.

The analyst said that Canadian Pacific has tried in the past to acquire the Belt Railway Co. of Chicago, which is jointly owned by North America's six large railroads, and said, "we would not be surprised" if the company renews that effort should it be unable to identify other assets.

If Canadian Pacific remains committed to buying a large competitor, CSX and Norfolk Southern Corp. (NSC - Get Report) — CSX's primary eastern rival — appear to be the most vulnerable to a takeover.

In addition to Canadian Pacific, Canadian National Railway Co. (CNI - Get Report) , Union Pacific Corp. (UNP - Get Report) and Berkshire Hathaway Inc.'s (BRK.B - Get Report) BNSF Railway could all be potential suitors.