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It will be reviewed by Kansas City Southern management a proposed $ 33.7 billion bid At the hands of Canadian National, the latest twist in the purchase struggle for the U.S. train operator could lead to the biggest merger of the year.
Kansas City Southern has already teamed up with CN opponent Canadian Pacific It offered $ 28.9 billion including debt The U.S. will acquire the company in the last month, but shareholders will review it due to a duty of reliability to evaluate the higher bid, CN said on Saturday.
Both transactions would create the first North American railroad in Canada, the U.S., and Mexico, and would be the largest transaction between railroad operators since 1999.
“We are confident that CN is the best proposal, the best partner, the best rail and the best solution for the KCS and the North American economy,” Robert Pace, chairman of the Canadian National Committee, said in a statement.
The Calgary-based Canadian Pacific said the Kansas City management’s review of the opponent’s offer “only fulfills its obligations under the CP merger agreement.” He added “that encourages us [Kansas City Southern] we will examine the details of the CN offer as soon as possible, which we believe will lead to questioning the true value of our proposal and securing their proposal. “
Kansas City Southern did not immediately respond to a request for comment. Earlier a person close to the company told the Financial Times that Canada’s national offer could be further scrutinized by the U.S. surface transportation commission.
It was not immediately clear what the deadline for reviewing the offers might be.
In exchange for $ 325 a share, $ 200 in cash, Montreal’s Canadian national stock offer represents a 21 percent premium to the Canadian Pacific offer, $ 275 per share, $ 90 in cash, with the rest in stock.
The two Canadian companies operate in the central and eastern United States, along with rivals CSX and Norfolk Southern. Kansas City Southern is the smallest of the seven Level 1 railroad operators in the United States, but the only operation that runs from north to south, with a network of routes from Missouri to both coasts of Mexico.
The last great railway agreement was in the twentieth century. It happened at the turn of the century, when CSX and Norfolk Southern bought Conrail together.
Additional news from James Fontanella-Khan and Ortenca Alloy
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