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Kansas City Southern chooses CN bid, terminates CP merger agreement
CP asking Surface Transportation Board to allow railway to keep application on hold as CN-KCS merger process plays out
1 324 4 minutes read Kansas City Southern has decided to accept CN s merger offer. (Photos: Jim Allen/FreightWaves, CN)
The board of directors for Kansas City Southern (KCS) unanimously determined last week that CN’s offer to acquire KCS was “superior.”
But Friday’s announcement seals the deal. As a result, KCS has terminated its merger agreement with CP and has entered into a merger agreement with CN.
The agreement calls for each share of KCS common stock to be exchanged for $200 in cash and 1.129 shares of CN common stock, according to a KCS release.
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Canadian Pacific (NYSE: CP) and it s going with the merger offer from CP rival
The board of directors for Kansas City Southern (KCS) unanimously determined last week that CN s offer to acquire KCS was superior.
But Friday s announcement seals the deal. As a result, KCS has terminated its merger agreement with CP and has entered into a merger agreement with CN.
The agreement calls for each share of KCS common stock to be exchanged for $200 in cash and 1.129 shares of CN common stock, according to a KCS release.
KCS said it paid a $700 million breakup fee, which CN will reimburse.
Canadian National Ry. – Control – Kansas City Southern
Dear Ms. Brown:
I am writing on behalf of the Canadian Pacific
1 in response to the Motion to Adopt Procedural Schedule for Renewed Motion for Approval of Voting Trust Agreement (CN-15) filed by Canadian National ( CN ) this morning.
CN s proposed three business day period for public comment on a Renewed Motion it has not yet prepared or filed is not constructive,
2 and is based on the false premise that members of the public were under an obligation to respond yesterday (
i.e., were only a few hours from the deadline to do so ) to CN s previous motion for voting trust approval. The Board should not be cowed by CN s gamesmanship and aggressive tactics.
CP’s letter, reproduced below in full, comes three days after CN proposed a voting trust using the same trustee, former KCS President and CEO Dave Starling. “STB has already decided that CP’s proposed use of a voting trust is subject to the pre-2001 merger rules, which entails different standards and processes than those governing CN proposal for review under current regulations,” CP said.
The letter is from whom many industry observers say is arguably one of the best railroad regulatory attorneys in practice today, David L. Meyer:
The Honorable Cynthia T. Brown Chief, Section of Administration, Office of Proceedings Surface Transportation Board 395 E Street S.W. Washington, DC 20423