Canadian Pacific (CP) reported June 1 that it “remains confident” in its “superior status” as Kansas City Southern’s (KCS) merger partner, noting that more than 130 stakeholders have filed statements with the Surface Transportation Board (STB) requesting the rejection of merger rival CN’s voting trust application.
The Surface Transportation Board (STB) on May 28 sent identical letters to the Class I railroad CEOs—the second set of letters in as many days—requesting that they continue providing quarterly information about their revenues from demurrage and accessorial charges.
Surface Transportation Board (STB) Chairman Martin J. Oberman has called on the CEOs of the seven North American Class I’s to provide an update on their preparedness to meet service demands, particularly as railroad employment rates have fallen.
The war of words between Canadian Pacific and CN isn’t over, with CP on May 27 issuing a statement that its merger rival’s commitment to divest Kansas City Southern’s New Orleans-Baton Rouge line is a “token divestment [that] would not begin to address the competitive issues in the rail corridors running north from Louisiana and Mississippi through America’s heartland, where KCS and CN have historically competed.”
Proposed merger partners CN and Kansas City Southern (KCS) have filed with the Surface Transportation Board (STB) a renewed motion for voting trust approval, which includes a commitment to divest a 70-mile line overlap in Louisiana.
Fitch Ratings has affirmed Kansas City Southern’s Long-Term Issuer Default Rating (IDR) and senior unsecured rating at ‘BBB.’ In addition, Fitch has affirmed KCS’s Short-Term IDR and senior unsecured rating at ‘F2.’ Fitch’s Rating Outlook is ‘Stable.’
CN and Kansas City Southern (KCS) on May 21 entered into a definitive merger agreement that, barring an unexpected twist, ends weeks of a tug of war between CN and Canadian Pacific.
Canadian Pacific President and CEO Keith Creel on May 20 responded to the Kansas City Southern Board of Directors and President and CEO Pat Ottensmeyer calling on them to reject CN’s counter-proposal “in light of intervening events” and stay with “the achievable, compelling value under the pre-existing merger agreement” with CP. Creel also confirmed that CP will not engage in a bidding war with CN.
On May 19, we hosted a call with a noted transportation attorney to discuss the latest news surrounding the proposed merger involving KSU/CP/CNI. The STB decision on May 17 indicates more caution surrounding voting trusts; CNI must show that the trust keeps a level playing field. The key for CNI will be that public benefits outweigh harms.
MidRail LLC Chairman Gil Lamphere offers his views on the competition between Canadian Pacific and CN to acquire Kansas City Southern, discussing the details of voting trusts and the role of the