Canadian Pacific Railway makes new bid for Kansas City Southern valued at $31B US
Rival offer by Canadian National Railway Co. valued at $33.6 billion US
Canadian Pacific Railway Ltd. is making a new takeover offer for Kansas City Southern that values the U.S. railway at $31 billion US.
The new bid comes ahead of a vote on Aug. 19 by Kansas City Southern shareholders on a rival offer by Canadian National Railway Co. valued at $33.6 billion US.
However, CP Rail said it believes its offer is more likely to be approved by U.S. regulators.
"At the time of CN's offer in May, we chose to not make a revised offer because we believed that engaging in a bidding war with CN would have been value destructive to CP shareholders," CP Rail CEO Keith Creel wrote in a letter to the KCS board.
"However, we believe that now is the right time for us to re-engage with KCS, as the regulatory uncertainty of the proposed CN merger has placed KCS stockholders in the unfortunate position of having to vote on the proposed CN merger and, as a consequence of approving such proposal, eliminate KCS's ability to consider superior offers, all the while not having any level of certainty with respect to whether the STB will approve CN's use of a voting trust."
CP Rail has urged KCS shareholders to reject the CN deal because of the regulatory uncertainty of its rival's offer.