CALGARY — The competing bids for U.S. railway Kansas City Southern each received a boost with the U.S. regulator saying a 2001 merger waiver applies to Canadian Pacific Railway, while KCS's board says CN Rail's proposal could lead to a superior proposal.
The U.S. Surface Transportation Board recently said that a merger between CP and KCS would result in the fewest overlapping routes compared with any other Class l railroad.
But KCS's board of directors on Saturday unanimously determined that CN's proposal of $325 per KCS share could lead to a superior proposal, potentially forcing CP to increase its offer.
KCS says its decision to engage in discussions and negotiations with CN is warranted considering the financially superior offer.
CN says more than 400 of its stakeholders have filed letters with the regulator in favour of its proposed merger with KCS, while hundreds of others have supported CP.
Meanwhile, CP says it doesn't object to CN Rail's request to appoint the same person as trustee in their competing bids for KCS, saying the two proposals are different.
CP announced in March its appointment of former KCS president and CEO David Starling as trustee in its merger transaction with KCS.
This report by The Canadian Press was first published April 26, 2021.
Companies in this story: (TSX:CNR, TSX:CP)
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