• ITVI.USA
    15,484.520
    -72.190
    -0.5%
  • OTLT.USA
    2.864
    -0.020
    -0.7%
  • OTRI.USA
    20.280
    -0.250
    -1.2%
  • OTVI.USA
    15,476.270
    -70.710
    -0.5%
  • TSTOPVRPM.ATLPHL
    2.890
    0.070
    2.5%
  • TSTOPVRPM.CHIATL
    3.540
    -0.040
    -1.1%
  • TSTOPVRPM.DALLAX
    1.290
    0.030
    2.4%
  • TSTOPVRPM.LAXDAL
    3.660
    0.010
    0.3%
  • TSTOPVRPM.PHLCHI
    2.360
    0.030
    1.3%
  • TSTOPVRPM.LAXSEA
    4.100
    0.080
    2%
  • WAIT.USA
    129.000
    2.000
    1.6%
  • ITVI.USA
    15,484.520
    -72.190
    -0.5%
  • OTLT.USA
    2.864
    -0.020
    -0.7%
  • OTRI.USA
    20.280
    -0.250
    -1.2%
  • OTVI.USA
    15,476.270
    -70.710
    -0.5%
  • TSTOPVRPM.ATLPHL
    2.890
    0.070
    2.5%
  • TSTOPVRPM.CHIATL
    3.540
    -0.040
    -1.1%
  • TSTOPVRPM.DALLAX
    1.290
    0.030
    2.4%
  • TSTOPVRPM.LAXDAL
    3.660
    0.010
    0.3%
  • TSTOPVRPM.PHLCHI
    2.360
    0.030
    1.3%
  • TSTOPVRPM.LAXSEA
    4.100
    0.080
    2%
  • WAIT.USA
    129.000
    2.000
    1.6%
NewsRail

Surface Transportation Board OKs amended CP-KCS voting trust

Procedural schedule for merger to come later

The Surface Transportation Board has affirmed its previous approval of a voting trust that Canadian Pacific would use as part of the process to acquire Kansas City Southern.

The board had first approved CP’s (NYSE: CP) proposed voting trust in May. But KCS (NYSE: KSU) opted instead to merge with CP rival CN (NYSE: CNI). However, the KCS-CN relationship soured after STB denied CN’s request to use a voting trust, which both CN and CP said would protect KCS shareholders during the merger process as well as prevent any premature takeover of KCS.

KCS and CP subsequently rekindled their merger aspirations, and CP resubmitted a modified voting trust, which STB affimed on Thursday. CP modified the voting trust amid CP’s revised offer to KCS, which was made in August.

The board’s decision is available here

STB noted that CP requested to establish a procedural schedule in which there would be a 10-month period between CP’s filed application with the board to acquire KCS and the board’s actual decision. The board said it would solicit comments on a proposed procedural schedule in a separate decision.

STB’s affirmation of the voting trust wasn’t unanimous, with board member Robert Primus being the sole dissenter because he felt the board missed an opportunity to scrutinize the proposed merger under stricter, post-2001 merger rules.

“In the interest of the public good and for the well-being of the national rail network, any further consolidation of the Class Is should be subjected to the current merger rules which call for the board to consider whether the public interest is best served by a merger agreement’s proposed voting trust,” Primus said in a dissenting opinion. He was also the lone dissenter in the board’s decision to allow the CP-KCS merger to be considered under the older, pre-2001 merger rules. 

Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.

Click here for more FreightWaves articles by Joanna Marsh.

Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.

Leave a Reply

Your email address will not be published. Required fields are marked *

We are glad you’re enjoying the content

Sign up for a free FreightWaves account today for unlimited access to all of our latest content

By signing in for the first time, I give consent for FreightWaves to send me event updates and news. I can unsubscribe from these emails at any time. For more information please see our Privacy Policy.