[ad_1]
Kansas City Southern has backed a sweetened $ 34 billion bid from Canadian National in a coup against Canadian Pacific Canada as the bidding war for the rail operator heats up.
CN has offered to pay KCS shareholders $ 200 in cash and $ 1,129 of its shares, from $ 200 in cash and 1,059 shares of CN common stock.
The overall value of the deal remains unchanged: KCS shareholders will still pay $ 325 per share, but the higher component of CN shares reflects a fall in the price of shares of the Montreal-based rail group .
KCS, which had already agreed to be acquired per CP for $ 29 billion including debt, he would have to pay a $ 700 million commission to break the deal.
Either merger would create the first railroad spanning Canada, the United States and Mexico, a route that is expected to experience increased traffic when U.S. economies recover from the coronavirus pandemic.
“After consulting with the company’s external legal and financial advisors, KCS’s board of directors determined that CN’s revised proposal constitutes a“ Superior Company Proposal ”as defined in the KCS merger agreement with Canadian Pacific Railway, “KCS said in a statement.
CP has five days to return with a higher bid, which should exceed at least the 20% premium offered by CN, in what has become a battle for acquisition.
The race to buy the smallest of the seven Class 1 railroad groups serving the U.S. freight market is the boldest attempt to consolidate the industry since CSX and Norfolk Southern acquired Conrail in 1999 and split it between both of us.
The agreement comes a year after the US-Mexico-Canada trade agreement replaced the US Free Trade Agreement, further raising hopes for a boom in cross-border business activity.
CN has been the charming offensive since he played KCS, posted ads and created a website called Connected Continent to attract support for his offering.
“We are the best offer, best partner, best rail and best solution for KCS, and we are pleased that the KCS board of directors has recognized the superiority of our proposal,” Robert Pace, chairman of the board, said on Thursday. CN.
[ad_2]
Source link
