TCI Ups Its Stake in CN; STB Rejects Voting Trust. What Next? (UPDATED)

On Aug. 30, 2021—the day before the Surface Transportation Board rejected the voting trust for the proposed CN/Kansas City Southern merger—TCI Fund Management Ltd. filed a Schedule 13D form with the U.S. Securities and Exchange Commission to report that it had increased its stake in CN to 5.2%. TCI already is CN merger rival Canadian Pacific’s second-largest shareholder. Some industry observers found TCI’s move “interesting” and “critical” as the activist hedge fund has strongly objected to CN’s merger attempt with KCS.

KCS Teaming With Louisiana College on Women’s Scholarship Program

Kansas City Southern (KCS) is partnering with Northwest Louisiana Technical Community College (NLTCC) to support the education and training of three female students pursuing careers in the diesel, electrician, industrial maintenance technology, industrial instrumentation, electrical technician or welding fields.

KCS Reschedules Stockholder Meeting for Sept. 3

Kansas City Southern (KCS) stockholders will now vote on the “definitive merger agreement” with CN on Sept. 3, 2021, KCS reported.

Savage, KCS to Launch Louisiana Railport

Savage, a Utah-based global infrastructure and supply chain services company, is teaming with Kansas City Southern (KCS) to build a multi-commodity railport for transloading and storage in Mossville, La.

Commentary

Why STB’s Inquiry Is a Public Service to Intermodal Shippers

Jim Blaze takes a technical look at the Class I’s responses to the STB’s inquiry on intermodal from his experience dating back to 1968.

STB Issues Decision on CP’s Declaratory Order Petition

The Surface Transportation Board (STB) has granted in part Canadian Pacific’s (CP) petition for declaratory relief: It confirmed that CP may use “discovery” under STB regulations to seek relevant material from Kansas City Southern (KCS) to prepare its control application.

KCS Speaks Out on CP’s Preliminary Proxy Statement

Canadian Pacific’s SEC filing asking Kansas City Southern shareholders to vote against the proposed CN-KCS combination is “part of an effort to defeat a transaction that offers KCS shareholders $50 per share more than CP was willing to offer,” KCS said in an Aug. 2 statement.

CP: ‘Extremely Well Positioned’ for Second-Half ’21

“Our ability to deliver sustainable, profitable growth has never been stronger,” Canadian Pacific (CP) President and CEO Keith Creel said during the railroad’s second-quarter 2021 earnings announcement.

CN: ‘Strong’ 2Q21, Voting Trust Answer Expected Soon

CN followed potential merger partner Kansas City Southern (KCS) in reporting financial results for second-quarter 2021, noting C$3.598 billion in revenues—an increase of 12% over the prior-year period—and a 13% increase in revenue ton-miles (RTMs).

KCS 2Q21: Strong Volume; Service ‘Short of Expectations’ (Updated, Cowen)

Kansas City Southern (KCS) on July 16 was the first Class I to report second-quarter 2021 earnings. For the possibly merger-bound railroad, revenue of $749.5 million grew 37% from the prior-year period ($547.9 million) based on higher carload volumes (up 31%), higher fuel surcharge, and the strengthening of the Mexican peso against the U.S. dollar. Service quality, however, was somewhat short of company expectations.

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