KC Southern Board Rejects Newest Offer, But Might Apply Brakes On Merger Vote

Both Canadian railways sounded positive Thursday after the Kansas City Southern board of directors met to consider Canadian Pacific’s revised merger offer. While the board voted unanimously to declare that CP’s $31 billion proposal was not superior to the merger agreement inked with Canadian National in May, the board did note that if the Surface Transportation Board has not released a public decision on their review of CN’s $33.6 billion deal by Tuesday, the shareholders meeting scheduled for the morning of August 19th would be postponed to a later date.

Kansas City Southern’s board continues to recommend that its shareholders vote in favor of the deal with Montréal-based Canadian National. In a statement, president and CEO JJ Ruest says the two firms remain committed to, “moving forward to create the premier railway for the 21st century that will enhance competition, drive economic growth and realize the benefits of a fully end-to-end transportation network connecting North America.” Calgary-based Canadian Pacific said in its statement that they applauded the decision to delay the vote if the STB doesn’t render a decision in time, noting that it will give shareholders time to consider the regulator’s review and determine which of the two proposals is more likely to receive STB approval.