For those of you who don’t read or speak Latin (including the author), terminabitur translates to “terminated” or “discontinued.” Resumo translates to “resumed” or “picked up where we left off.” E duobus,
Surprise, surprise: On Sept. 4, 2021, four days after the Surface Transportation Board slammed the door shut on the CN-Kansas City Southern voting trust, effectively killing the proposed merger of the two Class I’s, the KCS Board of Directors has unanimously determined, after consultation with outside legal and financial advisors, that the “unsolicited proposal” received from Canadian Pacific on Aug. 31, 2021 to acquire KCS in a cash and stock transaction valued by CP at $300 per KCS share “could reasonably be expected to lead to a ‘Company Superior Proposal’ as defined in KCS’s merger agreement with CN.”
The activity involving Kansas City Southern and its two potential merger partners, Canadian Pacific and CN, took yet another turn late on May 13. CN appears to have come out on top, but don’t count CP out, at least not yet.
As Canadian Pacific and CN vie for a merger with Kansas City Southern, the letters of support for both potential transactions continue to pile up at the Surface Transportation Board. On May 10, it was CP’s turn to up its count, as it reported 131 new letters.
Canadian Pacific on April 30 filed a formal objection with the Surface Transportation Board stating that CN “does not qualify for a waiver of the STB’s rules for major transactions, with respect to CN’s unsolicited proposal for Kansas City Southern.”
One month after Canadian Pacific and Kansas City Southern announced their intent to merge into CPKC (Canadian Pacific Kansas City), CN made a counter-offer it said is a “superior proposal” that “will
The letters keep coming: Railway Age has obtained a letter Canadian Pacific President and CEO Keith Creel sent to his counterpart at Kansas City Southern, Pat Ottensmeyer, pointing out in detail “the dimensions of competition between KCS and CN.”
A Cowen and Company “snap” railroad shipper survey conducted over a one-day period indicates that CN “is likely to have a more difficult time with shippers supporting its proposed acquisition of Kansas City Southern. This compares to a more favorable view by shippers of Canadian Pacific acquiring KCS in our most recent survey.”
A bidding war has broken out for the Kansas City Southern, but it’s actually more like a chess game. Here are some observations about what it all could mean, especially in terms of railroad “real estate,” from my economist observation post.
Just when we thought Railway Age would get a brief break from publishing letters about mergers, here’s another one, from the North Dakota Grain Dealers Association (NDGDA) to the Surface Transportation Board re-iterating its support of the Canadian Pacific-Kansas City Southern combination.
