Kansas City Southern is returning to its original merger partner after federal regulators rejected CN’s proposed voting trust, which would’ve been used to acquire KCS.
Kansas City Southern shareholders pushed back a vote on whether to approve CN’s merger agreement to Sept. 24.
Stakeholders and observers such as Amtrak, Canadian Pacific and the Vermont Department of Transportation want the Surface Transportation Board to consider placing conditions that would bolster both competitive access and passenger rail service.
Kansas City Southern shareholders must decide whether to continue to pursue merger plans with CN or go with Canadian Pacific.
The Surface Transportation Board rejected CN’s application to establish a voting trust, which would be used as part of the process to acquire Kansas City Southern.
KCS’ board of directors confirmed plans to postpone the shareholder vote on the CN-KCS merger agreement until after the Surface Transportation Board renders a decision on CN’s proposed voting trust.
Kansas City Southern declined Canadian Pacific’s revised bid, opting to stick with CN. But a shareholder vote to approve the CN-KCS merger agreement could be held off if the Surface Transportation Board doesn’t issue its decision on CN’s voting trust by Tuesday.
CP is offering a stock-and-cash “superior proposal” worth an estimated US$31 billion.
Kansas City Southern told its shareholders to focus on the proposed CN-KCS merger transaction and not on Canadian Pacific’s attempts to cast doubt on the merger’s chances of being approved by federal regulators.
The Surface Transportation Board has accepted CSX’s revised application to acquire Pan Am Railways, allowing the acquisition proceedings to continue.
