Six months after the two railroads first agreed to a deal, Kansas City Southern and Canadian Pacific have come full circle and are set to come together. The KCS Board of Directors announced Sunday that a revised deal submitted by Calgary-based Canadian Pacific meets the definition of a “Company Superior Proposal”. The deal values Kansas City Southern at $300 per share, or about $31 billion. It remains an increase of $6 billion from the initial merger agreement the two railways signed in March, setting off a bidding war with rivals Canadian National. The CN proposal totaling $33.6 billion was accepted by KCS in May, but a critical part of the deal was rejected late last month by the Surface Transportation Board.
KCS says they will inform CN of their plans to terminate the merger agreement and begin the tie-up process with Canadian Pacific. CN has five days to pursue amendments to their deal, but CBC News is reporting that the Montréal-based railway is facing pressure from a major shareholder to abandon the deal entirely, overhaul its board, and refocus on improving its operations. Kansas City Southern has until Monday to formally accept Canadian Pacific’s revised proposal.