Kansas City Southern board agrees to re-engage with CP Rail, after regulator rejects CN bid
Kansas City Southern has agreed to re-engage with Canadian Pacific Railway Ltd. after the U.S. transportation regulator placed a roadblock in the path of the bid from rival Canadian National Railway Co.
The U.S. railway says its board of directors unanimously determined that CP’s unsolicited proposal worth about US$31 billion including debt could “reasonably be expected to lead to it becoming a superior proposal” to CN’s bid, worth about US$33.6 billion including debt.
KCS intends to provide CP with non-public information and to engage in discussions and negotiations with the Calgary-based railway.
Kansas City Southern says it remains bound by the terms of the CN merger agreement and has not determined that CP’s proposal is in fact superior.
CP Rail, which has given a deadline of Sept. 12 for KCS to consider its offer, says it looks forward to re-engaging with KCS.
The U.S. Surface Transportation Board unanimously rejected CN and KCS’s joint motion for approval for use of a voting trust, something it approved for CP.