Kansas City Southern sticks to Canadian National after Canadian Pacific fails to raise bid
Reuters
Published May 21, 2021 09:49AM ET
Updated May 21, 2021 12:36PM ET
(Reuters) -Kansas City Southern on Friday reiterated that Canadian National Railway's offer was "superior" after Canadian Pacific (NYSE:CP) Railway refused to raise its bid, moving a step closer to creating the largest ever merger of North American railways by transaction value.
The Canadian rivals have been locked in a takeover battle for the U.S. railroad operator for two months to create the first railway spanning the United States, Mexico and Canada, as they stand to benefit from a recent pick-up in trade.
Kansas City Southern (NYSE:KSU) last week accepted Canadian National's $33.6 billion offer, upending a $29 billion deal with its competitor Canadian Pacific.
The U.S. railroad on Friday said it paid Canadian Pacific a breakup fee of $700 million, which would be reimbursed by Canadian National.
Canadian Pacific said on Friday it was willing to re-engage with Kansas City, hoping that the rival bid would be shot down by the U.S. Surface Transportation Board (STB), a regulator that oversees railroad companies.
Canadian National's deal has recently run into regulatory hurdles, with the STB having denied its motion for approval of a voting trust earlier this week. The U.S. Department of Justice had also said last week that Canadian National's bid for Kansas City appears to pose greater risks to competition.
Canadian National and Kansas City said they expect to gain all the required regulatory approvals, including that from STB.
Kansas City said the deal is expected to close in the second half of next year, following which its shareholders will own 12.6% of the combined company.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.