Per the Surface Transportation Board’s (STB) request, proposed merger partners CN and Kansas City Southern (KCS) have filed financial documents that will help STB decide whether or not to approve their voting trust agreement. Canadian Pacific, not surprisingly, responded with heavy artillery fire, with support from rail labor.
The Surface Transportation Board (STB) has directed proposed merger partners CN and Kansas City Southern (KCS) to submit by June 14 certain financial documents, which will inform public comments on their voting trust agreement.
Having been one of the three Surface Transportation Board (STB) Members who voted on the 2001 Major Merger Rules, it seems clear to me that the CN voting trust satisfies the new rules requirements addressing “unlawful control” and the “public interest” when deciding to approve or reject a voting trust. As such, it should be approved so that the Board and the public may move forward to consider the merits of the proposed transaction.
During what will most likely be the first of many joint appearances as their merger process progresses, CN President and CEO JJ Ruest and Pat Ottensmeyer, his counterpart at Kansas City Southern, said that their jointly filed voting trust application “meets the Surface Transportation Board’s public interest test under current merger rules.”
CN and Kansas City Southern (KCS) reported June 2 that they have received more than 400 letters of support for their proposed merger since KCS chose to partner with CN on May 21 over rival Canadian Pacific (CP).
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 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.