Canadian Pacific Railway Says Remains Ready To Re-engage With KCS - Quick Facts

(RTTNews) - Canadian Pacific Railway Limited (CP, CP.TO) announced Friday in a letter sent to the Surface Transportation Board (STB) that it remains ready to engage with Kansas City Southern (KSU) or KCS, to enter into another agreement to acquire KCS. It added that the new agreement can be substantially in the same lines of the terminated agreement, which was already reviewed by the Board.

The KCS Board of Directors recently decided to terminate the previous Merger Agreement with Canadian Pacific. In March, Canadian Pacific agreed to acquire KCS in a stock and cash transaction representing an enterprise value of about $29 billion.

Later on April 20, Canadian National Railway (CNI, CNR.TO) made a proposal to buy KCS in a cash-and-stock transaction valued at $33.7 billion, including $3.8 billion of KCS debt.

However, Canadian National's agreement to acquire KCS is conditioned on its ability to acquire KCS shares in advance of receiving Board approval to control KCS via the use of a voting trust. The KCS board of directors designated Canadian National's offer a "superior proposal."

Canadian Pacific now intends to proceed with the preparation to seek Board authority to acquire control of KCS. It believes that pursuing the acquisition is in the best interests of both KCS and the public so that the pro-competitive Canadian Pacific /KCS transaction can proceed to be reviewed by the Board.

Further, in the event KCS's agreement with Canadian National is terminated or Canadian National is otherwise unable to acquire control of KCS, a potential acquisition of KCS by Canadian Pacific could be implemented without undue delay, all in accord with the rulings and processes already established by the Board.