News Alert: Kansas City Southern intends to accept ‘superior’ CN proposal
KCS will seek to end merger agreement with Canadian Pacific
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Kansas City Southern chooses CN's merger proposal. (Photo: Jim Allen/FreightWaves)
Upon receipt of a revised acquisition proposal from CN, Kansas City Southern (KCS) has decided to deem that proposal as “superior.”
By accepting CN’s proposal, KCS would have to break up proposed merger plans between itself and CN’s rival Canadian Pacific (NYSE: CP). CP has said it will not counterbid.
CN’s revised proposal calls for each share of KCS common stock to be exchanged for $200 in cash and 1.129 shares of common stock, including the assumption of approximately $3.8 billion of KCS debt. KCS shares would own 12.6% of the combined company. This would give CN’s proposal an enterprise value of $33.6 billion.